Introduction

Stock certificates come in two forms: paper and electronic. For more information, see our blog post on electronic stock certificates. You can use the platform 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 has 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 can run the Create New Stock Certificates workflow, and for replacement certificates run the Reissue Existing Stock Certificates workflow.

Creating New Stock Certificates

New stock certificates can be created within a workflow, such as Grant Shares or Options, or they can be deferred for creation at a later date using the Create New Stock Certificates workflow. To get started, go to Start New Workflow > Equity > Create New Stock Certificates. 

Select which deferred stock certificates to generate and click Continue. 

At the Checkpoint you can review the generated certificates and manage the restrictive legends before sending the workflow for legal review. 

NOTE: Generated stock certificates have the 1933 Legend already included in the certificate. See this article for more information about legends management. 

Once approved by your legal counsel, the certificate(s) are sent to the corporate officers for signature. Once signed, the certificates are fully executed, and your cap table will be updated. If you are not ready to inform the holders that the certificates have been created, check the box to Do not send email. You can invite those users later by running the Send Invite to Existing Users workflow. Otherwise, click continue to notify the holders, and if they are new to the platform, invite them to create their account. 

Reissuing Stock Certificates

The Reissue Stock Certificates workflow allows you to create electronic stock certificates that were previously issued either in paper or in a different equity management system. You can select which certificates to create and manage the restrictive legends before generating the certificates. 

Let's Get Started 

From the company workspace go to Start New Workflow > Equity > Reissue Stock Certificates. Select how to proceed with documenting evidence of certificate cancellation. You have choices to upload an affidavit or similar document from each stockholder, have the stockholder acknowledge receipt of the new certificate when accepting their electronic certificate, or waive any evidence of the replacement. In most cases, where companies are coming from another equity management system, they choose the second option. 

Select Stock Classes 

The next step will ask you to indicate for which classes of stock you'd like to create certificates. You can select any combination of the classes that have shares to be reissued. Often, companies wish to send their stockholders a different message about their certificates and will run the workflow for specific stock classes. 

Select Certificates to Convert 

Select which certificates to convert from the list of certificates created outside of the platform. Click Continue to start generating the new certificates. 

Note that the certificates make take several minutes to an hour or two depending on the number of certificates you are generating. You can return to this workflow at a later time from the Workflows section on the Company Workspace. 

Checkpoint

At the checkpoint you can review the generated certificates. You can edit individual certificates, update the legends, or download a PDF. You can also preview and edit the email that is sent out to the stockholders.

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. 

When ready, click Continue. This will send the certificates for legal review. Once approved, the certificates are sent to the company officers for signature. 

As a reminder, the 1933 Act legend will be included automatically. If you'd like to see a sample stock certificate generated in Fidelity Private Shares, please see this article.

Once the stock certificates have been signed, the stockholder alerts will go out and the recipients will be invited to log into their account to view their certificates.