When you purchase shares in a company, those shares are represented by a stock certificate. A stock certificate is a piece of paper that legally represents ownership of a company. Increasingly shares are traded electronically so investors may not ever actually see a physical stock certificate. When an investor buys stock, he or she receives the stock certificate or the brokerage firm holds it on their behalf.
The stock certificate includes the name of the corporation, the place/state of incorporation, the number of authorized shares, and the par value of each share. A stock certificate is negotiable and can be transferred by endorsing (signing) the back or instructing the brokerage firm to sell the share(s) on your behalf.
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