California stock certificate requirements

The holder is entitled to the certificate

Cal. Corp. Code § 416(a) is written as an entitlement, not as a printer's suggestion. Every holder of shares in a corporation shall be entitled to have a certificate. The certificate is signed in the name of the corporation and it certifies the number of shares and the class or series of shares owned by the shareholder. A company that simply never gets around to certificates is arguing with that entitlement.

The signature block is a pair of groups, and both groups have to be represented. One signature comes from the chairperson or vice chairperson of the board, or the president or a vice president. The other comes from the chief financial officer or an assistant treasurer, or the secretary or any assistant secretary. Two presidents do not satisfy the section. Two secretaries do not either. Read the titles before the names are typeset under the lines.

Any or all of the signatures may be facsimile. That permission is in the same subdivision. It does not reduce the count to one group. If the officer, transfer agent, or registrar who signed, or whose facsimile was placed on the certificate, has ceased to hold that role before the certificate is issued, the corporation may still issue it with the same effect as if the person still held the role on the issue date.

What the confirmed sections put on the paper

Cal. Corp. Code § 417 applies when shares are classified or any class has two or more series. On the certificate, or on the initial transaction statement and written statements if the shares are uncertificated, the corporation sets out one of three things: the rights, preferences, privileges, and restrictions of each class or series; a summary of them with a reference to the articles and any certificates of determination; or a statement of the office or agency where a shareholder can obtain, on request and without charge, a copy of the full statement. A Class 2 printed set, $56.00 for 20, is the catalog face with room for a second class. A single class can use the Class 1 set at the same $56.00.

Dropping paper is a gated choice

Cal. Corp. Code § 416(b) says a corporation may adopt a system of issuance, recordation, and transfer by electronic or other means that does not involve certificates. The system has to be one of three things: approved by the United States Securities and Exchange Commission, authorized in a statute of the United States, or in accordance with Division 8 of the Commercial Code. The subdivision also says the system includes notice to purchasers in substitution for the statements that certificates would have carried under Cal. Corp. Code § 417 and Cal. Corp. Code § 418(a)-(b).

That system does not become effective for shares that are already represented by certificates until those certificates have been surrendered to the corporation. Announcing that the company is "paperless" does not cancel certificates that are still in drawers. Collect them, or the old paper is still the certificated security.

Legends, and the close-corporation sentence

Cal. Corp. Code § 418(a)-(b) adds statements that have to appear when they apply, unless they were already stated or summarized under Cal. Corp. Code § 417. The list includes the fact of a transfer restriction, a statement that shares are assessable or not fully paid, a voting agreement or voting restriction, the fact that shares are redeemable, and the fact that shares are convertible together with the conversion period. Statements about transfer restrictions and about assessable or unpaid shares have to be conspicuous.

If those statements are missing, a transfer restriction, a redemption right, and the listed voting arrangements are not enforceable against a transferee without actual knowledge. The same subdivision says liability to assessment, or for the unpaid part of the subscription price, is not enforceable against a transferee unless it is stated on the certificate. "Transferee" includes a purchaser from the corporation.

Cal. Corp. Code § 418(c)-(d) is a separate legend for a close corporation. The face of every certificate must carry a conspicuous legend that the corporation is a close corporation, that the number of holders of record of all classes cannot exceed a number not in excess of 35, and that an attempted voluntary lifetime transfer which would violate that limit is void. The legend also points the reader to the articles, bylaws, and agreements on file with the secretary. If the certificate contains that legend, an attempted voluntary inter vivos transfer that would push the holder count over the maximum in the articles is void.

Replacing a certificate that is gone

Cal. Corp. Code § 419(a)-(b) covers a certificate alleged to have been lost, stolen, or destroyed. A domestic or foreign corporation may issue a new share certificate, or a new certificate for any other security, in its place. The corporation may require the owner, or the owner's legal representative, to give a bond or other adequate security sufficient to indemnify the corporation against any claim, including expense or liability, on account of the loss or the new certificate.

If the corporation refuses, the owner or the legal representative may bring an action in the superior court of the proper county for an order requiring a new certificate. This page is not that complaint. It is the reason the stock records should already show the certificate number, the holder, and the share count before anyone asks for a replacement. The issuance steps that sit around the certificate are in how to issue stock certificates. Replacement across several states is in lost stock certificate replacement.

What to order for a California issuance

Certificated shares: Printed Standard Certificates Class 1 at $56.00, or the Eagle one-class set at $56.00 if the border is the only change. Two classes or series: the Class 2 set at $56.00, with the Cal. Corp. Code § 417 statement actually filled in. Do not buy the $21.00 electronic set as a shortcut around Cal. Corp. Code § 416(b). The wider face comparison, including states that do put par value on the front, is in what must appear on a stock certificate.

Questions

Who signs a California stock certificate?

Cal. Corp. Code § 416(a) requires one signer from chairperson, vice chairperson, president, or vice president, and one from chief financial officer, assistant treasurer, secretary, or assistant secretary. Any or all of those signatures may be facsimile.

Can a California corporation stop issuing paper certificates?

Yes, if it adopts a system under Cal. Corp. Code § 416(b) that the SEC has approved, a United States statute authorizes, or that follows Division 8 of the Commercial Code. Certificates already outstanding have to be surrendered before that system covers them.

What goes on the certificate when there are two classes?

Cal. Corp. Code § 417 requires the rights, a summary tied to the articles, or a statement of the office where the shareholder can get the full statement on request and without charge.

Does California require par value on the certificate?

Not in Cal. Corp. Code § 416(a) or Cal. Corp. Code § 417. Those sections certify number and class or series, and, when shares are classified, the rights or a free-copy statement.

What legend does a close corporation use?

Cal. Corp. Code § 418(c)-(d) requires a conspicuous face legend that the corporation is a close corporation, that holders of record cannot exceed a stated number not in excess of 35, and that a voluntary transfer which would break that cap is void.

What if a California certificate is lost?

Cal. Corp. Code § 419(a)-(b) allows a new certificate and allows the corporation to require a bond or other adequate security. If the corporation refuses, the owner may sue in superior court for an order requiring issuance.

Are transfer restrictions enforceable if they are not on the certificate?

Cal. Corp. Code § 418(a)-(b) says a transfer restriction that is not stated as required is not enforceable against a transferee without actual knowledge. The restriction statement has to be conspicuous.

Statutes last checked November 3, 2026. Official text: Cal. Corp. Code § 416(a); Cal. Corp. Code § 417; Cal. Corp. Code § 419(a)-(b).