When I was little, I used to love looking at paper stock certificates — I thought that they were so pretty. As I got older, I liked to look at paper stock certificates because I really was looking at money! However, now, I find dealing with paper stock certificates to be a hassle. In fact, most investors agree, and many companies do not even offer paper stock certificates to their shareholders anymore. The reason? They are costly to produce and track.
And that’s important — because what happens if you lose your stock certificates? I recently encountered this scenario and it was a bit scary. It was like losing a $20,000 check — something that you just don’t want to do. Luckily, we found the missing stock certificates in my dad’s safe deposit box, but not before I started looking into the process of what would happen if I lost my stock certificates.
If you ever find yourself in this situation, here’s what you need to know (and do). Before we get started, the first thing you should know is that you shouldn’t panic. Even if you don’t have the physical shares, you still own the stock. In fact, if you don’t plan on selling (ever), you will still receive your dividend payments and other notices like nothing is wrong. The only trouble arises if you ever do want to sell your shares — you need to sign over the stock certificates, just like you would endorse a check.
Contact the Issuing Company
The first thing that you need to do is contact the company that issued the shares. You should contact the company’s investor relations department, and ask which transfer agent they use to handle their stock certificates.
A transfer agent is a company that essentially is the record keeper of shareholders for the company. The transfer agent will know how many shares you have, the stock certificate numbers, and have all your contact information. Once you have the information for the transfer agent, it’s time to contact them.
Contact the Transfer Agency
When you contact the transfer agency and report your share certificates missing, you’ll have to go through several steps to get the shares replaced. When you first notify the transfer agent, the agency will place a “stop transfer” on the missing certificates to prevent others from cashing them. Think of this like a stop payment on a check. The transfer agency will then notify the Securities and Exchange Commission about the missing stock certificates as well.
In order for the transfer agency to process your stop transfer, you’ll need to do the following:
- Provide an affidavit: You’ll need to describe the lost certificates and the circumstances surrounding the loss. It could be as simple as I moved and lost the certificates, or it could be the result of theft or fraud. Make sure that you’re as detailed as possible.
- Purchase an indemnity bond: You’ll have to purchase an indemnity bond to protect the company and transfer agency in case the stock certificates are redeemed at a later date. Every transfer agency charges a different rate, but my transfer agent charged 3% of the value of the stock certificates, and I’ve read that the rates can range from 1%–5%.
- Pay a fee to reissue the certificates: Whenever you issue paper stock certificates, you’ll pay a fee. My transfer agent charges $50 to issue the shares, but every transfer agent and brokerage is different. I’ve seen rates up to $500 to issue stock certificates.
Once you’ve provided the information and it’s been verified, you’ll have new shares issued to you.
Prevention Tips to Expedite Replacement and Avoid This in the Future
If you find yourself in this situation, that’s rough. But there are ways to expedite replacement and also avoid this in the future.
One of the first things that you can do is make photocopies of any share certificates you own (front and back), and put the copies in a known location. You should always store your share certificates in a safe place, like a safe deposit box, but keep the photocopies in your office file cabinet. Then, if you lose your shares, you can reference the photocopies to get the process started. It’s quicker if you provide the missing share certificate numbers, versus having the transfer company research the loss.
To avoid this in the future, just don’t hold paper stock certificates! If you use an online broker, all of your shares are electronically held for you. If you currently hold paper stock certificates, you can simply go to the broker of your choice and deposit your paper shares into your account. Then, all of your shares will be held electronically and you don’t have to worry about losing your stock certificates.
Don’t know where to start? Check out our list of great online stock brokers:
You can also check out the full list here: The Best Online Stock Broker Comparison Tool.
What are your thoughts about owning paper stock certificates? Have you ever lost them?
Editor’s Note: Want to dive deeper into investing? Here are some articles The College Investor likes to promote:
Bryce @ Save and Conquer says
We had paper stock certificates for the company I currently work for when it was privately owned. We have since been bought out by a publicly-owned company. We had to surrender all paper stock certificates at the time of the buyout. I hated to see the pretty pieces of paper go away forever. I was happy to see my bank account swell with the buyout capital, though.
Tonia says
I have purchased my stock certificate through nyc hpd 60-40 program and I do nt know how or who to get a copy from my building only has a treasurer and a secretary who is not cooperating and said she has no idea of how I will get a copy please help me I need it for court appearance and no one is helping me
jerry carman says
I purchased 1100 shares of stock at .25 cents a share from a man named Jim Jones. It was for an oil product he was putting on the market himself. I left the area and lost track of the stock. Also lost my certificate. I was told that the stock or company changed hands a few times . ? How can I nd my certificates if even possible. Thank you, jerry
Robert Farrington says
You should be able to contact the investor relations or transfer company of the new company – they will have your information. However, it does also sound like it could have been a scam.
Josh says
Can I put paper options I’ve bought that I vested at my first company into a brokerage account? Or do I have to wait until there’s some sort of exit by the company (ipo or buyout)??
Robert Farrington says
If your company isn’t public, you have to wait until it is before you can transfer your shares to a brokerage. Until then, you have to hope those options become worth something.
Napoleon Patague says
Hi
i have stock certificate, i emailed the transfer agent and ask me to scanned the stock certificate, i don’t have scanner but i capture it using camera, and send to them, but after that the transfer agent didn’t reply to me anymore.
do you think can copy my certificate and make it their own?
Robert Farrington says
No, a stock certificate is like a check – you have to have the actual certificate and you have to endorse it. While fraud can happen, it’s very rare.
Paul says
Can someone please point me in the right direction . I bought stock from Sprint around 25 years ago. I don’t have my certificates. Who should I contact to find out what I need to do? Any information to help me would be greatly appreciated!
Robert Farrington says
You should contact the Investor Relations for Sprint and seek assistance.
Sharon Cree says
Can someone help me?? It must hav been about 36 years ago or so… My dad purchased stocks in Sunkist..at the time he thought they went under and ripped up the certificates.. He has since passed (1994)..how can I find out if he did indeed hav stocks purchased and how to go about claiming them?? I’m pretty sure it was Sunkist and Crush..
Robert Farrington says
You should be able to reach out to Dr. Pepper Snapple Group (the owner of Sunkist and Crush) and see: http://investor.drpeppersnapplegroup.com/stock-information
Richard Marshall says
I own 400 shares of Merck and I can’t find the certificate.The transfer agent wants fourteen hundred dollars for me to sell them. Isn’t this excessive?
Robert Farrington says
There is a bond to replace lost share certificates that’s about 2-3% of the value. Plus, there’s fees associated with it. It’s a bit higher than I’d expect, but not unheard of.
Judy helding says
In order to replace my lost stock certificates from Verizon I will have to pay over two thousand dollars! I am thinking of just not replacing at this time I am not trying to sale them husband passed away was going to take his name off but found out I am missing the main certifacts
Robert Farrington says
Yes, depending on the value you’ll have to post a bond in case they are ever found and redeemed. However, you may want to diversify your portfolio and selling can make sense.