Share certificate

What a share certificate shows

A certificate connects a named holder to specified shares in an issuing company. Section 51 of the Companies Act sets requirements for certificated securities, including the company's name, the holder's name, the number and class of shares, any relevant series designation and restrictions on transfer.

The certificate must be signed by two people authorised by the board. The Act permits autographic, mechanical or electronic signatures and provides that a certificate remains valid despite a signatory later leaving office. A change of director therefore does not by itself invalidate every certificate that director previously signed.

The Act treats a compliant certificate as proof of the named holder's ownership in the absence of evidence to the contrary. This is a meaningful evidential role, but it does not justify ignoring a contradictory register, an invalid underlying transaction or evidence that the certificate has been superseded.

Why reconciliation comes before replacement

A certificate is often requested during an ownership review, bank enquiry or company sale. The reader should match the company identity, holder and share description to the current securities register. If the company has changed its name, supporting name-change records can help explain continuity of identity.

Where a name or share number is wrong, establish the correct facts from the original issue or transfer documents. Changing the certificate without checking those records can turn an administrative error into a misleading ownership statement. Preserve an understandable record of the correction and any cancelled or superseded document.

The guide to correcting a shareholder name on a certificate distinguishes mistakes from real ownership changes. During a purchase, use the shelf-company due diligence and handover checklist to request the register and supporting history as well as certificates.

Illustrative example: a misspelled holder name

A shareholder notices a spelling error on a certificate. The company checks the identity evidence, original share issue records and register. Those records consistently identify the correct person, and there is no proposed sale or gift of the holding.

The company follows an authorised correction process and retains a link between the inaccurate certificate and the corrected record. It does not describe the work as transferring the shares to a new owner because the evidence supports correction of the same person's details.

If the documents instead identify different people, the company pauses the cosmetic correction and investigates the ownership issue. The example illustrates why the nature of the discrepancy determines the response. A certificate template cannot resolve a disputed share transaction or create missing authority for it.

What a certificate does not prove

A share certificate is not the company's CIPC registration certificate, a director disclosure or confirmation of tax compliance. It does not show that the company has no debts, that the shares can be freely sold or that the holder may sign every contract on the company's behalf.

Replacing a certificate is also not the same as issuing additional shares. New shares change the issued share position through a separate process. Share certificate assistance should identify whether the task is an original issue, a transfer-related update, a replacement or a factual correction, and reconcile the supporting records accordingly.