If you have received stock from an employer as part of your compensation or have invested via a private placement of stock in a company that later issued an IPO, you might hold a certificate for unregistered or restricted stock. Such certificates are supposed to carry a legend -- usually a stamp on the face of the certificate -- indicating when the restriction expires. Before you can sell the stock, the legend must be removed, the stock registered with the SEC, and a new unrestricted certificate issued.
Check the legend on the face of the certificate to find out when the restriction expires. If the restriction has expired, your brokerage firm may accept it and register it for your account. Otherwise, look for the name of the transfer agent of record, which should also appear on the face of the certificate.
Contact the transfer agent if your broker won't accept your certificate without registration or if you are no longer employed by the company that issued the stock. Transfer agent procedures occasionally differ, but you will probably have to obtain a letter from the company's attorney stating that you qualify to have the restriction lifted and your stock registered.
Follow the transfer agent's instructions. You might be able to download all the forms you need from the transfer agent's website or they will send them to you. Sometimes a transfer agent has specific wording needed in the attorney's letter.
Contact the investor relations department of the company that issued the stock. Ask to whom you should direct your request for the attorney's letter for stock registration. If the transfer agent supplies you with a form attorney's letter or specific wording, send that along with your request.
Send your original certificate, the attorney's letter, and any forms required to the transfer agent by certified mail. If you haven't received your new certificates after a month, contact the transfer agent to check on the progress of the certificate registration process.
- Technology has made stock certificates somewhat rare. In fact, according to Scottrade, the vast majority of securities outstanding in the marketplace are held in electronic form in customer accounts, with 75 percent of them held in "Street Name" -- the term for registration under the name of the brokerage firm. Some investors still have their securities registered in certificate form and sent to them. In this case, the certificates are automatically registered by the brokerage firm in the name of the account.
- Decide the exact name in which the securities are to be registered. If you need the certificate registered under a trust name, or if you are married and want it registered under a joint-tenancy, deliver your new registered certificate back to the transfer agent to have registration transferred to the new name. You may also deposit it to your brokerage account if the broker will accept it for re-registration in the new name for you.
Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.