When a stock certificate is no longer valid for trading, it is canceled. Companies used many different methods for canceling stock certificates in the past. A canceled certificate may show one or more of these methods, or it may show none. Often, the determination of whether or not a stock certificate has been canceled is relatively simple, but it may require some persistence to know for sure.
1. Look for handwriting on the face of the certificate. A large "X" may appear across the page, the officers' signatures may be marked out or the word "canceled" may be written on it. Any of these indications lets you know that the certificate has been canceled. If you don't see any writing, look for other telltale signs.
2. Examine the stock certificate for evidence that it has been hand-punched. If so, you will see two or more small holes, usually over the officers' names. Sometimes the holes will be large, rectangular punches across the bottom of the certificate or several rows of punches. Certain certificates will have small pinholes spelling out dates or words. In a few cases, the punches have been made with a letter punch. If you see evidence of these punches on the certificate, then it has been canceled. No further inquiry is necessary.
3. Search the front of the certificate for the word "CANCELED" applied by rubber stamp. This may be stamped one or more times across the front of the page; or the word "VOID" may appear. The ink will typically be red or black.
4. Hold the stock certificate up to a light and check for cuts. These will often be in the shape of an "X" or a "V," or a piece of the certificate will have been removed, often the signature of one or more officers. Other shapes may also have been punched or cut into the certificate, indicating that it has been canceled.
5. Contact the issuing corporation to inquire about the stock certificate if it doesn't have visible markings. The company will ask you for the number of the stock certificate, which is printed on the front of the page, to research the records.
- Check with the Secretary of State in the state where the company was incorporated for more information about the business.
- Company records are regarded as the final authority on whether a stock certificate has been canceled. If you have any doubt about the status of a certificate, contact the company directly.
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