What is a Stock Certificate?
In short, a stock certificate is written proof that an investor has invested in the company when a share of stock was acquired. Many people are under the wrong impression that traders invest in stock. In fact, all traders invest in companies. Traders may ask for stock certificates to be issued to them directly. It will then be the responsibility of the trader to safeguard the certificate personally. In the majority of instances traders may request and entrust a brokerage firm in safeguarding the stock certificate on their behalf. As a note of interest, there are two types of stock, common and preferred. Common stock is the only type that most corporations issue to investors. Not all companies issue stock. In order for a company to be listed on a stock exchange and issue shares of stock, the company needs to be a Corporation and comply to all rules, terms and conditions of the stock exchange they are listed on before they can issue shares to investors.