A stockbroker or transfer agency may issue stock share certificates in the name(s) of the owner(s) or owners, or the certificates may be kept in book form. The steps must be followed exactly to ensure a successful transfer of stocks. Although each transfer agency will have their own set of instructions for transfers, the fundamentals and sequence of the actions will be the same.
To find out whether he accepts a transfer request on the back of the stock certificate or calls for a separate transfer of ownership form, get in touch with the transfer agent named on the stock certificate.
The “medallion signature guarantee” must be used to witness each existing owner’s signature on the stock certificate or transfer form. A bank or stockbroker can provide a medallion signature guarantee. Each signature has to be made in the presence of the person who has the ability to guarantee medallion signatures.
As instructed by the transfer agent, include each new owner’s name, address, social security number, or taxpayer identification number, either on the transfer form or the back of the stock certificate.
For your records, make copies of all documents.
Send the stock certificate and transfer form to the transfer agent’s address, using certified or registered mail if necessary. Two percent of the common share value should be insured on the mailing.
At the address or locations specified in the transfer papers, new share certificates will be mailed to the new owner or owners.
A transferring owner’s signature must exactly match the name on the stock certificate. If the transfer involves a name change, a non-U.S. owner, or a minor owner reaching legal adulthood, the transfer agent may give further instructions. If you are unsure about signing the stock certificate, you can send an unsigned stock certificate together with a letter of instruction that includes the assurances and signatures.
A notary public’s certification of a signature is not the same as a medallion’s signature guarantee, therefore thus is ineligible for the transfer of stock ownership. When shipping stock certificates, insurance is advised because the cost to replace a lost or destroyed certificate is typically 2% of the value of the stock shares.