The formal requirements for a Certificate of Shares are set out in § 508 of the New York Corporation Law, under which the face of each share certificate should state the following:

  • That the company is incorporated under the laws of the State of New York
  •  The identity of the person to whom the shares are issued
  •  The number and class of shares, together with the series designation (where shares are issued in series)

Share Certificates and Shareholder Records in a New York Corporation

When you form a corporation in New York, issuing shares to its owners is one of the first important steps after incorporation. Share certificates are tangible evidence of ownership, but they are only one part of the picture. Keeping proper records of who owns the shares, and on what terms, is just as important for the long-term health of the company.

Why Share Certificates Still Matter

A share certificate shows who holds shares in the corporation, how many and of what class. Banks, investors, buyers and foreign authorities may ask to see evidence of ownership, for example when you open an account, raise funding or prove that you control the company. A properly prepared certificate that meets the legal requirements, signed by the appropriate officers, helps avoid doubts about who owns the business.

Keeping a Stock Ledger

Alongside the certificates, a corporation should maintain a stock ledger, also known as a share register, recording each issue and transfer of shares. A complete and accurate ledger is valuable evidence in any dispute and is often reviewed during due diligence when the company is sold or seeks investment.

Good Practice for Shareholders and Directors

  • Issue shares only after the board has properly authorised the issue
  • Record the consideration paid for the shares
  • Number certificates and keep copies in the corporate records
  • Document any restrictions on the transfer of shares
  • Record transfers promptly and cancel old certificates when new ones are issued
  • Keep minutes and resolutions together with the share records

Different Classes of Shares

Some corporations issue more than one class of shares, for example with different voting rights or rights to dividends. Where this is the case, the certificates and the corporation’s governing documents should describe the rights attached to each class clearly, so that all shareholders understand their position.

Using Corporate Documents Abroad

If you need to present share certificates or other corporate documents outside the United States, they may need to be notarised and legalised with an apostille. Planning this in advance helps you meet deadlines set by foreign banks or authorities.

Contact eTuls if you need help forming a New York corporation, preparing share certificates or maintaining corporate records, including apostilled documents for use abroad.