Stock certificates come in two forms: paper and electronic. For more on the advantages of electronic stock certificates, check out our blog post here. You can use Shoobx to generate electronic stock certificates for your stockholders.
The first consideration when creating stock certificates is whether the stock certificate is new (i.e. it's never been created before in any form) or if you're replacing an existing certificate (whether that's paper or electronic from another system).
For generating new stock certificates, you'll want to run the Create New Stock Certificates workflow, and for replacement certificates, you'll run the Reissue Existing Stock Certificates workflow. If you want to change the signatories for your stock certificates, navigate here.
Creating New Stock Certificates
New stock certificates can be created within a workflow, such as Grant Shares Outside / Under Stock Incentive Plan, or they can be deferred for creation at a later date, using the Create New Stock Certificates workflow.
In this workflow, the user will be asked which certificates they want to create, from a list of all deferred stock certificates that were queued up in earlier workflows. Once the stock certificate(s) are chosen and generated, the workflow owner will be able to view and sign the stock certificate(s) if they are a corporate officer, or the workflow will route the certificate(s) to the corporate officers for signature.
Please note that all Shoobx stock certificates have the 1933 legend already included in the certificate, if you would like to make changes to this text reach out to Client Support.
Also note that, depending on the company's counsel involvement settings, the certificates may be routed to the company's outside counsel for review before they can be signed.
Once signed, the owner of the certificate can simply log in to their Shoobx account and select the "My Documents" heading from their dashboard (for more detailed steps, read this). Similarly, the workflow owner will be able to review this document through the grantee's entry on the company's Capitalization Table.
Reissuing Stock Certificates (from paper or another system)
When you run the "Reissue Stock Certificates" workflow, you will be able to either (1) convert paper stock certificates to electronic stock certificates, or (2) generate electronic stock certificates to replace ones that were previously issued in another system.
The first step in the workflow will ask you how you wish to document the replacement. You have choices to obtain an affidavit or similar document from each stockholder, and upload that in the workflow, have the stockholder acknowledge receipt of the new certificate when they get it, or waive any evidence of the replacement. In most cases, where companies are coming from another equity management system, they choose the second option.
The next step will ask you to indicate which classes of stock you'd like to create certificates for. You can select any combination of the classes that have shares to be reissued. Often, companies wish to send their common stockholders different messages about their certificates, so they choose to do all common certificates first, and then run the workflow again for all preferred certificates.
The following step will allow you to indicate which certificates within the chosen class or classes you'd like to create.
The next step in the workflow will be the Checkpoint. Here, you can review the front and back of each stock certificate by clicking the PDF button.
Note that, if you are generating more than 100 stock certificates in a workflow, you'll be presented with an Excel spreadsheet that you can download to make the review process easier. It will contain the details for each certificate (e.g. holder, number of shares, certificate number), along with the applicable legends.
As a reminder, the 1933 Act legend will be included automatically. If you'd like to see a sample stock certificate generated on Shoobx, please see this article.
You can also make any desired changes to the email that will go to these stockholders, telling them that they have a stock certificate to view in Shoobx.
If any email addresses for these stockholders are missing from your Shoobx account, you will be asked to add them as well.
Please note here as well that, depending on the company's counsel involvement settings, the certificates may be routed to the company's outside counsel for review before they can be signed.
The stock certificates will then be routed to the company's President and Secretary for review and signature.
Once the stock certificates have been signed, the stockholder alerts will go out and the recipients will be invited to log into Shoobx and view their certificates.
Should you wish to change the officers that sign stock certificates (e.g. to the company's CEO and President, rather than President and Secretary), you can follow the process below.
On the lefthand side of the screen, click the "Company" dropdown, and select "Administration."
In the "Equity Settings" box, select the "Stock Certificate Signatories" option.
Make the changes you're hoping to make. You can indicate that you'd like any of the company's presidents/secretaries/treasurers to be able to sign certificates, or you can pick an individual officer from the dropdown. Be sure to click "Save" when you're done.
Screenshots are for illustrative purposes only.
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