Knowledge Base: Share certificates - all you need to know

A share certificate is an official document that serves as evidence of ownership of shares in a company. It is issued to shareholders and includes key details such as the shareholder's name, the number of shares owned, the type of shares, and the date of issuance.

Share certificates - all you need to know

Share certificates serve as proof of ownership for shareholders and provide legal security for their investment. For companies, they help maintain accurate ownership records and ensure compliance with corporate regulations.

Key features of a share certificate

1. Company Name – The legal name of the company issuing the shares.

2. Shareholder Name and Address – The individual or entity that owns the shares.

3. Share Class – The type of shares issued (e.g., ordinary shares, preference shares).

4. Number of Shares – The quantity of shares held by the shareholder.

5. Nominal Value of Shares – The par value of the shares, which may differ from the price paid.

6. Certificate Number – A unique identifier for tracking the share certificate.

7. Date of Issue – The date the certificate was issued.

8. Company Seal and Signatures – Signatures from company directors or officers validating the certificate.

How share certificates are issued on FounderCatalyst

FounderCatalyst automates the issuance, management, and storage of share certificates. Here’s how the process works:

Once investors have paid for their shares, you mark the investment as received on the platform and we will create a share certificate, which will be made available in the data room. The investor will also be emailed their share certificate.

For companies with two or more directors, the process is straightforward: we will issue signed share certificates directly from the platform.

However, if your company has a single director then the Companies Act stipulates that any share certificate must be issued with the signature of a director that has been witnessed by an adult who is not related to you. In this instance, the following protocol applies:

1. You should print the share certificate and sign it in the presence of a witness, who should countersign it as prescribed on the certificate.
2. You should send the certificate by registered post to your investor.

How can investor download their share certificate?

Their share certificate will be in the data room in folder 3. 'Investor-specific documentation'. They can also download it from the cap table page clicking the three dots next to their name. The founder(s) can also access share certificates from the data room or cap table and share with investors.

FAQs

Why does my share certificate show a different price than what I paid?

Share certificates display the nominal price (par value) of shares, not the actual price paid. This is because, by law, share certificates must show the nominal value set in the company’s articles of association. See the guidance.

What is the nominal price?

The nominal price is a small, fixed value assigned to shares (e.g., £0.01 or £1 per share). It does not reflect the actual investment amount.

Where can I find the actual price I paid for my shares?

The actual price, including any premium paid above the nominal value, is recorded separately in the company’s financial records and shareholder agreements. You can refer to share purchase agreements or cap table reports available in FounderCatalyst for this information.

Can share certificates be used as proof of ownership?

Yes, share certificates provide legal evidence of ownership.

What happens if a share certificate is lost?

For digital certificates on FounderCatalyst, shareholders can always access and download replacements. If a physical certificate is lost, a new one can be issued following company procedures.

What happens if I have an offline investor?

We issue the share certificates - for more information on offline process see our offline guide