A stock certificate is a physical piece of paper but holds more value than a normal piece of paper as it represents the ownership of a company.
They include information like an identification number, the number of shares owned, the date, a corporate seal & signatures and most of them are designed in a convoluted fashion to demotivate the fraudulent acts.
After some time of possession of stock certificates, these certificates simply become old stock certificates. The passage of time may convert it into a treasure of cash and can turn it into collectable stuff of paper.
In either case, if you want to sell the old stock certificates, you have some choices for selling them.
- One is by encashing them with the help of the transfer agent of the company who withholds the stock.
- Another way is by selling them, again with the help of the broker.
The transfer agent is a bank or trust company who acts as an intermediary for the company to pay out interest and stock dividends and to handle the lost or destroyed stock certificates. He is primarily responsible for issuing and canceling the stock certificates. Publicly traded companies take the help of transfer agents to manage individuals and organizations who possess shares of their stock but sometimes a very large company, for instance, Walt Disney plays the role of transfer agent for itself.
Transfer the Stock to Direct Registration:
Instead of keeping a physical stock certificate, one can transfer the stock to direct registration with the help of a transfer agent. The dematerialisation process lets owners of stock certificates hold their shares in the form of book entry with the transfer agent.
Book-entry refers to the record of ownership of the stock in the books of the transfer agent and thus it replaces the physical stock certificate. Book-entry of stocks facilitates the selling process.
Sell Your Stock Shares:
It takes approx Ten days to transfer your paper stock to demat via a transfer agent. After the successful transfer one can easily sell the share certificate at any time by contacting the transfer agent and informing them that you want to sell.
dematerialisation quickens the selling process by eliminating the procrastination that occurs due to handling the physical stock certificate, and this further allows you to instantly grab the opportunities popping out of positive changes in the market.
Other Benefits Include:
- Protection from fraud and other risks present in paper certificates.
- Saves your money by knocking out the cost related to storage, printing and insurance of paper certificates.
- Mailing of the stock certificates to the transfer agent facilitates tracking.
Note: Make sure to figure out the value of your stock certificate before finalising the decision of selling it.