Printed Share Certificates - Are They Required Or A Waste?

This may be a surprise to a lot of people, but those fancy pre-printed share certificates that incorporation services and many legal publishing companies try to sell you are not legally required under modern corporate law.

If you don't believe me, check out what the Florida Corporation Laws have to say:

607.0626 Shares without certificates.--

(1) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

If you want to simplify your incorporation process and save some money on startup, you can resolve in your organizational actions to authorize issuing shares without certificates. You can also issue "paper shares" which are basically printed off your computer to evidence share ownership. The paper shares can include all the same information that is included on the pre-printed share certificates and can be sealed by the signature of the Secretary and President; just like you would seal an official share certificate. If properly authorized, paper shares have the same legal significance as pre-printed shares.

The document package that we offer take this approach. The organizational actions include an authorization for paper shares. The formation documents include paper shares that look very much like an official share certificate but without the printed eagles or whatever other decorative markings that you will find on the pre-printed certificates. This is perfectly legal and has the same significance as the fancier looking certificates.

Substance over form will save you quite a bit of money when you are looking at starting a new business. For other unnecessary items that are often offered by incorporation services and legal publishing companies, see my previous articles on Corporate Seals and Official Corporate Record Books.