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Brian Edward Walters

Brian Walters’s Answers

11 total

  • Reissue lost stock certificate

    I am a President of a small S Corp with 3 shareholders (including myself). All of us misplaced our original stock certificates, issued 5 years ago. We prepared affidavits of lost stock certificates and were going to re-issue the certificates to ...

    Brian’s Answer

    While I am not licensed in CA, I have seen corporate documents from most of the states in the union (including CA) and they tend to follow similar patterns regarding this issue. Typically, your corporation's bylaws will have a specific provision governing lost or misplaced stock certificates. As one of the other attorneys has suggested, you should follow the provisions of your bylaws in issuing new certificates, which commonly involves the holder of each lost certificate signing an affidavit stating that the certificate was lost. Once signed and placed in the corporate books, the corporation should have authority to reissue the stock certificates. That said, every set of bylaws is different, so you should take extra care to review the terms of your specific agreement.

    Additionally, your corporation should be keeping a stock transfer ledger in order to track share ownership and to document the names and addresses of current shareholders. This stock transfer ledger is also where you should list shares that were misplaced or lost. The share certificates and their entry on the ledger should be sequentially numbered (e.g. 001, 002, 003). If the first three certificates have been misplaced, you can reissue new share certificates (after reviewing the provisions in your bylaws - see above) in the same denominations as the previous certificates and document their re-issuance in the corporation's stock transfer ledger. Not unlike balancing your bank account, updating your stock transfer ledger keeps your corporate ownership current and accurate and also creates a document that can be reviewed by the other shareholders should they ask to see it.

    Lastly, when reissuing the shares, make sure that you review the provisions in your bylaws regarding who (which officers/directors) are required to sign the new share certificates so that everything executed properly.

    In summary, I would recommend speaking with a licensed attorney on this subject or at a minimum having him/her review your work when you complete it to ensure that all the proper corporate actions were taken and documented correctly.

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