How to Fill Out the Back of a Stock Certificate

A physical stock certificate serves as a tangible representation of ownership in a company, detailing the number of shares held by an individual or entity. While many shares are now held electronically, some investors still possess these paper certificates. The need to fill out the back of a stock certificate typically arises when ownership changes, such as during a sale, a gift, or the transfer of shares due to an inheritance. Properly completing this process is essential to legally transfer the securities to a new owner and update the company’s records.

Understanding the Stock Certificate’s Reverse Side

The reverse side of a physical stock certificate is designed for the assignment and transfer of ownership. This area often includes a section labeled “Assignment Separate From Certificate” or “Stock Power,” which authorizes the transfer of shares.

These typically include lines for the full legal name of the new owner, known as the assignee, and a space to clearly state the number of shares being transferred. Additionally, there might be a “Power of Attorney” section, which grants authority to a designated individual or entity, often the transfer agent, to execute the transfer on the owner’s behalf.

Signature lines for the current owner, or assignor, are prominently featured, requiring their exact signature as it appears on the front of the certificate. Spaces for the date of the assignment and the social security number or tax identification number of the new owner are also standard. A Medallion Signature Guarantee, a specialized stamp ensuring signature authenticity and legal capacity, is also found here.

Filling Out the Assignment and Transfer Form

When indicating the new owner, their full legal name should be written precisely in the designated space. If the shares are being transferred to multiple individuals, such as joint tenants, all names must be clearly listed.

The number of shares being transferred should be entered both numerically and, in some cases, in written form, ensuring consistency. Sign the certificate exactly as the name appears on the front, without alterations. Any discrepancies can lead to delays or rejection of the transfer.

The date of the signing should be recorded, along with the social security number or tax identification number of the new owner(s). This information is crucial for tax reporting purposes. Leaving fields blank or making errors in spelling can necessitate corrections, which can be a time-consuming process.

A Medallion Signature Guarantee is required for a valid transfer. A notary public’s seal is not an acceptable substitute for a Medallion Signature Guarantee.

Submitting the Certificate for Transfer

After completing the reverse side and obtaining a Medallion Signature Guarantee, submit the certificate for transfer. The recipient is typically the company’s transfer agent.

Transfer agents are entities appointed by companies to manage shareholder records, issue new certificates, and process transfers of ownership. To identify the correct transfer agent, you can usually find this information on the stock certificate itself, on the company’s investor relations website, or by contacting the company directly.

Along with the original stock certificate, additional documentation may be required depending on the nature of the transfer. For instance, if the transfer is due to the death of the owner, a certified copy of the death certificate and potentially court documents, such as Letters of Administration, will be necessary.

For transfers involving trusts or corporations, copies of the trust agreement or corporate resolutions authorizing the transfer and identifying the authorized signatories may be requested. An IRS Form W-9 (Request for Taxpayer Identification Number and Certification) for the new owner is also commonly required.

Use secure methods when mailing stock certificates. Options like Registered Mail, Certified Mail, or courier services provide tracking and proof of delivery.

After submission, the processing time for transfers can vary but typically ranges from a few days to several weeks.

Common Scenarios and Important Notes

For shares held under joint ownership, such as “Joint Tenants with Right of Survivorship” (JTWROS) or “Tenants in Common” (TIC), specific signature requirements apply. For JTWROS, often only the signature of the surviving owner is needed with a death certificate, allowing the shares to pass directly without probate. For TIC, the deceased owner’s share generally becomes part of their estate, requiring probate documentation for transfer.

When stock is held in the name of a trust or a corporation, the transfer requires signatures from the authorized trustees or corporate officers. Proof of their authority, such as excerpts from the trust agreement or corporate resolutions, must accompany the certificate.

If a stock certificate is lost or stolen, act immediately. You should contact the company’s transfer agent or a brokerage firm to place a “stop transfer” order, which prevents unauthorized transfers. Replacing a lost certificate typically involves providing an affidavit of loss and securing an indemnity bond. This bond protects the company and transfer agent if the original certificate is later presented.

You can typically obtain this guarantee from a financial institution where you are an established customer, such as a bank, credit union, or brokerage firm. To secure a Medallion Signature Guarantee, you will generally need to present a valid government-issued photo identification, the completed stock transfer form, and the original stock certificate or a recent account statement proving ownership. This guarantee is not a simple notary stamp; it involves the financial institution assuming liability for the authenticity of the signature and the signer’s authority.

When gifting stock, especially if its value exceeds the annual gift tax exclusion, which is $19,000 per recipient for 2025, the donor may be required to file a gift tax return (IRS Form 709). While the donor files the return, the recipient generally assumes the original cost basis of the donor for capital gains tax purposes when they eventually sell the stock. This means the recipient’s taxable gain is calculated from the donor’s original purchase price, not the value at the time of the gift.