The form of the stock certificate book and the general design of its certificates vary but little. The matter appearing on the body of the certificates is determined by custom or by the statutes of the state in which the corporation is organized. The essential requirements are that each certificate shall show the name of the company, the state in which it is incorporated, the total authorized capital, the name of the owner of the certificate, the number of shares which the certificate represents, the value of each share, the nature of the stock - whether common or preferred - and the date of issue. The certificate should also provide a blank form of transfer for the owner to use when his stock is to be assigned.
The certificates, which are usually in a bound volume, are numbered consecutively and have stubs numbered to correspond. These stubs contain blanks for recording the most important data given on the certificate.
The stock certificate book is usually kept by the secretary of the corporation. No difficulty is likely to be encountered in keeping it, provided the necessary entries are made at the time each transaction occurs. It is, however, of the greatest importance that no certificate be issued until the essential facts have been entered on its stub. When a certificate is surrendered for reissue, it should be cancelled by perforation, by a rubber stamp, or by some other method equally effective. It should then be pasted back on the stub of the stock certificate book from which it was originally torn, and there should be entered on this stub the number of the certificate issued in lieu thereof, or, if none is issued, the reason for its surrender.
These matters appear almost too elementary to dwell upon, and yet a vast amount of labor and trouble may be, and frequently is, caused by the failure of the secretary or bookkeeper to make the proper entries at the proper time.
Stock certificates are occasionally printed and kept loose, that is, not attached to any stub or bound in a book. Such a course is unwise and unsafe.