South African Share Certificates Explained
A share certificate (sometimes called a stock certificate) is a document issued by a company, signed by the directors of the company, to prove the legal ownership of all shares in the company. It is a record kept by the company, CIPC does not keep record of shareholding. Shares can be owned by a person, another business, or any registered entity.
The share certificate acts as legal proof of ownership and receipt of purchase of shares in the company. A company must issue a share certificate when any shares are issued or transferred. A company may issue only one share certificate for all shares issued(the original), or they may issue separate unique (numbered) certificates to each share holder, if requested.
A Share Certificate will include:
- The name and registration number of the company
- A unique Certificate number for each share certificate**
- The number of shares issued
- Shareholders name and ID number, or the legal registered entity listed as shareholder
- Issue date of shares
- Amount paid (or considered as paid) for shares
Share certificates may be required for numerous reasons:
- Proof of ownership of in a company:
- For legal disputes
- For business finance applications
- To open a new bank account for a business
- When shares are being sold or transferred
- When new shareholders are added
- If the company is sold
- For the payment of dividends
- For voting rights
**Every share certificate is unique and must have a unique sequential number that may not be duplicated or amended.
The company must keep an accurate record of shares issued and record them in the Companies Share Registry Book.
The share certificate must be signed by the Directors of the company, and witnessed.
The original signed certificate must be stored in a safe place.
The percentage of ownership of all shares must always add up to 100%.