Certificate of ownership

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Certificate of ownership is a formal document that evidences title to an asset. Example of certificate of ownership is share certificate. The certificate of ownership is usually issued based on registers kept by authorized body. In case of shares it is shareholder register.

Certificate of ownership is also used in other areas, e.g. to evidence ownership of the land. For example, when planning new construction, it is necessary to prepare planning application. It the applicant is not the sole owner of the land, he has to inform all other owners shown in certificate of ownership about the plans. Only if others owners agree, the application can be submitted to local authority.

Certificate – written proof, statement of something. It gives owner specified rights, confirmation of owning something, state's origin of the some goods (Certificate of authenticity).

Share/Stock Certificate

Share certificate – written document, signed by a representative of a corporation that serves as a proof of ownership of specified amount of shares. Share certificate is also related to stock certificate.

When company issues stocks/shares in the market, person who buys issued shares become shareholder and receive a share certificate. Simplifying, the share certificate is a receipt of purchase and gives ownership in the company on a basis of how many shares have been bought. In the process of time, share certificate may get damaged, lost or even stolen therefore it has to be reissued. Replaced document has to have the same number of shares written on it. Owner of document, in this case is obligated to give out destroyed document or give a proof that it have been stolen.

Certificate's key informations that should be included:

  • Certificate's number
  • Class of shares (For example, Google's class of shares: Class - A shares, Class – B, Class – C, they give you some privileges)
  • Address and full name of owner
  • Amount of owned shares
  • Shares’ issuing date
  • Company registration number and name
  • Value of shares paid by the buyer

Share certificate gives some privileges, like voting rights which are defined by the corporate law. Shareholder with a stock certificate can grant proxy to somebody else to have a voting rights.

Historical and modern context

Back in the days, stock certificate was the only proof to the dividends, without it, shareholder would not get any payment from entitlement to dividend. Historically, every time the certificate was submitted, the evidence of payment from rights to dividends was recorded on the back of it. Thanks to that, all payments were saved on the document.

Nowadays, with all the information technology, in modern markets, investors hardly become an owner of physical share certificates. Thanks to digitalization, share certificate can be sold or given away without moving away from the seat by our desk, it's being transferred through a book entry than through transfer of physical document. Basically, If owner finds a person who is willing to buy his shares, everything is made through IT system, they might not even meet each other.

Collectible value

Today, thanks to its beauty and sophisticated design, the older and more rare documents became highly collectible. Not only the beauty matters but also historical context does. Science called “Scripophily” study certificates and other financial documents from the past, also, colleting this documents is named the same. The more rare and extraordinary certificate is the higher value it represent, just like car collecting or an art.

Examples of Certificate of ownership

  • Share certificate: A share certificate is a legal document that proves ownership of a specific number of shares in a company. It contains the name of the shareholder, the number of shares owned, the class of shares, and other important information.
  • Vehicle registration: Vehicle registration is a legal document that proves ownership of a vehicle. It contains information such as the vehicle's make and model, its license plate number, and the owner's name and address.
  • Property deed: A property deed is a legal document that proves ownership of a specific piece of real estate. It contains information such as the property's address, its size, the names of the current and former owners, and other important details.
  • Patent certificate: A patent certificate is a legal document that proves ownership of a particular invention. It contains information such as the inventor's name, the date of the patent, and a description of the invention.
  • Trademark certificate: A trademark certificate is a legal document that proves ownership of a particular brand or logo. It contains information such as the owner's name, the date of the trademark registration, and a description of the trademark.

Advantages of Certificate of ownership

Certificate of ownership is a formal document that evidences title to an asset. There are several advantages associated with holding a certificate of ownership, including:

  • It serves as a proof of ownership, allowing the owner to easily prove their ownership of the asset.
  • It allows for the transfer of the asset to another person or entity, as the certificate is a legally binding document.
  • It allows for the asset to be used as collateral for a loan.
  • It provides the owner with a sense of security as they know they have legal rights to the asset.
  • It can be used to provide evidence of the asset's value, which can be beneficial for tax purposes.

Limitations of Certificate of ownership

A Certificate of Ownership is a document that evidences title to an asset, however there are certain limitations associated with it. These limitations include:

  • Unenforceability - The certificate of ownership is not a legally binding document, and therefore cannot be used to enforce any rights or obligations associated with the asset.
  • Limited Use - The certificate of ownership is typically used to evidence title to an asset, and cannot be used to transfer title or exercise any other rights associated with the asset.
  • Limited Scope - The certificate of ownership is limited to the asset specified in the document and cannot be used to evidence title to any other assets.
  • Replacement - The certificate of ownership may need to be replaced if it is lost, stolen, or damaged, which can be a lengthy and costly process.
  • Fraud - The certificate of ownership can be subject to fraud if it is not properly safeguarded.

Other approaches related to Certificate of ownership

A certificate of ownership can take various forms, depending on the asset to which it applies. These include:

  • A title deed, which is a legal document that grants a person or entity ownership of a piece of real estate.
  • A share certificate, which is issued to a shareholder of a company, and denotes ownership of a certain number of shares in that company.
  • A bond certificate, which is a legal document issued by a company or government entity to a bondholder, and evidences the bondholder's ownership of a certain number of bonds.
  • A patent certificate, which is issued by a government to the inventor of an invention, and grants the inventor exclusive rights to that invention.

In summary, a certificate of ownership is a formal document that evidences title to an asset, and can take various forms depending on the asset to which it applies.


Certificate of ownership — recommended articles
Share certificate — Limited warranty deed — Allotment letter — Absolute assignment — Master deed — Satisfaction of mortgage — Absolute title — Letter of administration — Shareholder register

References

Author: Grzegorz Szewczyk

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