What Are Share Certificates?
The share certificate is a document that states the number of shares you own. When someone buys your shares, they sign the share certificate to show their agreement to buy them. Share certificates are used for many reasons including -To distribute company profits among shareholders; -To transfer ownership of shares from one person to another; and -To provide evidence of entitlement to dividends and other rights attached to those securities.
Why Use Share Certificates?
Share certificates are the way that corporations raise money. They represent ownership in a corporation and they come with voting rights, dividends, and other benefits. Share certificates can be bought or sold on the stock market. Those who hold shares of stock in a company receive certain legal rights like information about financial records and access to shareholder meetings. There are many different types of share certificates for corporations including common stocks, preferred stocks, warrants to purchase shares at a predetermined price (also called call options), convertible bonds which can be converted into stock after some time has passed (called convertible debentures), etc. Share certificates can be very complex so if you need expert help we are here for you.
Pros & Cons Of Share Certificates
Issuing share certificates and stock is a fairly straightforward process, but it can bring about risks that you may not be aware of. We’ll cover the pros and cons of issuing share certificates to help you make an informed decision on whether or not this is right for your business. Share certificates can be used to transfer ownership from one person to another, but there are a number of potential problems that you should consider before handing over any documentation. our team helps explore some of the most common risks and how you can mitigate them in order to avoid financial loss or legal liability.
In some cases, this may cause increased scrutiny of your company and potential investors may be wary of investing. A more cautious approach would be to offer shares without any certificate being issued. For those who do want a certificate, there are certain steps that can reduce the risks associated with issuing share certificates: making sure you have enough money in reserve for dividends and other expenses; carefully considering how much information is included on your certificate; deciding if you want it printed or not printed; choosing an appropriate typeface for legibility. Regardless which option you choose, make sure that you consider all these risks before finalizing the decision as they could have significant impacts. We can email you a free template for issuing your companies share certificates and offer expert advice for businesses in Canada.
Get Free Legal Documents & Contracts. Our affordable legal team is ready if you need help.
Get a formal share certificate template to use for business in Canada
Get help determining if you should issue certificates
Share certificates can be useful for raising money from investors in exchange for ownership.
Get lawyers when you need them for the things you need - at a fraction of the price!
Stop over paying for legal documents and help. Choose Canada Business Lawyers.
Get Your Legal Documents & Templates Emailed