what to do with stock certificates of dissolved corporation

When a company goes defunct because of a merger or acquisition, its stocks may still be redeemable for cash or securities of the successor company. If the stock certificates do turn out to be legally worthless, they may still have some value as collectors’ items. Examine Carefully

Full Answer

How do I transfer stock certificates?

The transfer form is located on the back of the stock certificate. You must complete the form in the presence of a notary public. Next, you’ll send your old stock certificates to the transfer agent via certified mail.

How to issue a return on stock certificates?

You can find the right agent by contacting the current company’s stockholder services office. Companies very seldom employ in-house transfer agents. Therefore, you need to contact the current company transfer agent. They will tell you how to issue a return on stock certificates.

What forms do I need to dissolve a corporation?

They must file Form 966, Corporate Dissolution or Liquidation, if they adopt a resolution or plan to dissolve the corporation or liquidate any of its stock. Also, corporations may need to file these forms with their Forms 1120 or 1120-S: Form 4797, Sales of Business Property, if they sell or exchange property used in their business.

What happens to stock certificates when a company goes bankrupt?

When a company goes defunct because of a merger or acquisition, its stocks may still be redeemable for cash or securities of the successor company. If the stock certificates do turn out to be legally worthless, they may still have some value as collectors’ items.

What do you do with old stock certificates?

If you can find the company itself, you're in luck. All you need to do is contact the company and ask for its transfer agent. The transfer agent is the person that will help you get registered as the owner of the certificate and collect any uncollected dividends.

How do I cash in old stock certificates?

If you find yourself in possession of old stock certificates, you have a few options for selling them. You can cash them in through the transfer agent of the company with which the stock is owned. Or, you can work with a broker to sell the stock.

How do you liquidate stock certificates?

If you can track down the issuing company and get its CUSIP number, you can reach out to a transfer agent, complete a transfer form and place a sell order to cash in your old stock certificate. Otherwise, you could simply keep the certificate if the company no longer exists.

Are old stock certificates worth anything?

An old stock or bond certificate may still be valuable even if it no longer trades under the name printed on the certificate. The company may have merged with another company or simply changed its name.

What happens to the stock of a defunct company?

If the company survives, your shares may, too, or the company may cancel existing shares, making yours worthless. If the company declares Chapter 7, the company is dead, and so are your shares. Owners of common stock often get nothing when a company enters liquidation since they are last in line for payment.

What happens to shares in a defunct company?

A company's shares will be suspended when the business goes into administration and there are no real options for ordinary investors to trade them beyond this point, even if a buyer is found for part or all the business. In most cases the shares will eventually be delisted.

How do I know if my stock certificate is worth anything?

Contact your stockbroker to search the stock's worth via its CUSIP number if the steps given earlier yield no results. This number is printed on the back of the stock certificate. Use a fee-based service to search your stock's history if the earlier steps come up empty. Fees can range from $40 to $85 or more.

Who actually holds stock certificates?

Evidence of ownership is reported on a computer printout sent to the client. There is no question about who owns the stock. The purchaser is the sole owner, and the broker simply maintains the stock in his possession, often using it as collateral for a loan.

Where can I sell stock certificates without a broker?

One way to avoid a broker is to contact the investor relations department of the corporation whose shares you own and identify the company's transfer agent. You can sell your shares directly to the transfer agent.

How do I know if my old share certificates are still valid?

Another way to check on a share certificate's validity is to contact the company registrars whose name should be written on the certificate. Companies use registrars to keep a record of who owns their shares.

How do I sell stock certificates through Computershare?

Sales A Participant may sell all or a portion of the shares credited to his or her account at any time by submitting a request to Computershare online at www.computershare.com/investor, via telephone or in writing.

How do I sell my GE stock certificates?

If you want to sell your shares of GE stock, please contact GE's current transfer agent, Equiniti Trust Company (EQ). Note that sales are subject to a fee of $10 per transaction plus $0.15 per share sold. This fee structure was not changed as part of the switch to Equiniti Trust Company (EQ) as new transfer agent.

How does corporate dissolution affect shareholders?

The effect that corporate dissolution has on shareholders depends on the financial state of the corporation and on how the corporation dissolves. On the one hand, shareholders may see all or most of their original investment returned. On the other, shareholders may receive nothing or even be required to pay additional money if ...

What is the final step in a corporation?

The final step is the liquidation phase. In this phase, the corporation distributes its remaining assets to shareholders if there’s anything left after the corporation pays its outstanding debts.

What is a 1099-div?

Any shareholder receiving a distribution of $600 or more will also receive IRS Form 1099-DIV. The amount reported on the form represents how much of the shareholders’ investment the corporation is returning. The distribution isn’t taxable if the amount reported is less than or equals the original investment. If the distribution is less than the original investment, the shareholder can report a capital loss on annual income taxes. If the distribution exceeds the original investment, however, the excess is subject to short or long-term capital gains tax. Short-term capital gains tax applies if the investment was held for one year or less. Long-term capital gains apply if the investment was held for more than one year.

What is the second step in a voluntary dissolution?

The second step consists of winding up the business, notifying creditors and either paying or setting funds aside to pay debts when they become due. The final step is the liquidation phase.

Can a corporation sue a shareholder for unpaid taxes?

For example, if a corporation returns any money to shareholders while it still has outstanding debt, the creditor can sue the corporation and the shareholder will most likely be required to return the distribution. If outstanding debt includes unpaid taxes, a shareholder may become personally liable for repayment.

When did stock certificates end?

The demise of the stock certificate ends a centuries' old tradition. One of the oldest known examples of a stock certificate, found in Holland, was issued in 1606. It was around that time that the Dutch East India Company became the first company to issue stock.

How to get a share certificate?

The most obvious way to get your certificate is to go directly to the company that issued the stock, the issuer, and ask to have a physical certificate mailed to you. But going through the company can be an expensive and time-consuming process.

How to cash in stock?

In order to cash in the stock, you need to fill out the transfer form on the back of the certificate and have it notarized. Once complete, send the notarized certificate to the transfer agent, who will register the stock to you as owner. At that point, you can sell the stock through the transfer agent or via a stockbroker.

Is it easier to prove stock ownership?

Today, most of the world's exchanges have either done away with or are phasing out paper certificates. Stock ownership is much easier to prove now thanks to electronic records and electronic communication networks (ECN) .

Is a stock certificate a collectible?

Outdated Certificates As Collectibles. Stock certificates were often plain, straightforward documents. In their heyday, however, companies competed to create the most visually impressive certificates, which frequently were appealing examples of a printer's art. Some stock certificates are now collectors' items.

Where does incorporation go?

Generally, incorporation goes through the Secretary of State, and the name of the business will be documented in those databases. You should be able to contact the Secretary of State's office and find out more about your certificate. Stock Certificate.

Can you transfer ownership of stock to your name?

The transfer agent will have a record of the person's name on the stock certificate; ownership can then be transferred to your name. This can be done in many different ways, so it's always best to contact the transfer agent and request instructions. Many of them are extremely picky.

Can stock search companies help you find stock guides?

Stock search companies may also publish or help you find stock guides to assist you in investigating an old stock. However, it is often the case that the company will charge you more than the stock is actually worth. (For related reading, see: I Lost My Share Certificate.

What is a corporation closing?

Closing a corporation. A corporation is a separate taxpaying entity with shareholders that exchange money, property or both, for the corporation's capital stock. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders. S corporations are corporations that elect to pass corporate income, ...

What happens if a corporation doesn't deposit taxes?

If corporations don't withhold or deposit income, Social Security and Medicare taxes, the Trust Fund Recovery Penalty may apply. The penalty is the full amount of the unpaid trust fund tax. The IRS may impose it on all persons who the Service determines is responsible for collecting, accounting for and paying these taxes and who acted willfully in not doing so. A responsible person can be an officer or employee of a corporation, an accountant, a volunteer director/trustee, or someone who signs checks for the corporation or has authority to cause the spending of business funds.

What is S corp?

S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.

When do corporations have to take certain actions?

Corporations must take certain actions when ceasing operations whether they've been in business a few months or many years. Here's information on typical final forms and schedules that a corporation going out of business file.

How long do you have to keep records of employment?

Business owners should keep all records of employment taxes for at least four years.

How to know if a stock certificate is still valid?

Also, all seals and signatures should be undamaged. In other words, there should be no hole punches or stamps over any of the seals or signatures on the certificate.

What should be on the back of a stock certificate?

You have the information you need to investigate the worth of your old stock certificates. The transfer agent’s name should also be on the back of your stock certificate. If the stock certificate is very old, however, that information may be out-of-date as well.

How much does it cost to research old stock certificates?

The services of a stock certificate researcher may cost as little as $25 to $50. The stock certificate researcher can save the transfer agent a great deal of time.

Do you need a CUSIP number for a stock certificate?

This usually involves a fee. To do this, you’ll need the stock certificate CUSIP number. By law, every valid stock certificate must have a CUSIP number. The number is issued by the Committee on Uniform Security Identification Procedures.

What happens to a stock certificate if it is transferred to someone else?

If ownership of the shares represented by the stock certificate has been transferred to someone else, the certificate will bear stamps, signatures or seals on the back to indicate transfer of the shares, and the company signatures and seals on the certificate’s front will be canceled by punched holes or ink stamps.

What happens if you find a deceased relative's stock certificates?

When a company goes defunct because of a merger or acquisition, its stocks may still be redeemable for cash or securities of the successor company.

Is a defunct stock certificate a collectible?

If it turns out that your old defunct stock has no value as a security, the certificate itself may have value as a collectible. Scripophily is the hobby of collecting old stocks, bonds and other financial paper, and the Internet has information on what may be a valuable collectible stock.

What to do if your securities certificate is lost?

If your securities certificate is lost, accidentally destroyed, or stolen, you should immediately contact the transfer agent and request a "stop transfer" to prevent ownership of the securities from being transferred from your name to another’s. Your broker may be able to assist you with this process and the broker or transfer agent will report ...

What to do if you find a lost certificate?

If you later find the missing certificate, you should notify whomever you called to place the "stop transfer" so that the lost or stolen securities report may be removed. Otherwise, you may have difficulty selling the securities. If you are expecting a certificate through the mail and it doesn't arrive, you should immediately contact ...

Should securities certificates be safeguarded?

Securities certificates are valuable and should be safeguarded. To avoid the cost and burden of safeguarding certificates, some investors let their brokerage firm hold their securities for them in “street name”.

Can I get a new certificate to replace a lost one?

Replacing Securities Certificates. You can get a new certificate to replace the missing one. However, before issuing a new certificate, corporations usually require the following: The owner must state all the facts surrounding the loss in an affidavit;

Can you get a new certificate before an innocent purchaser?

The owner must request a new certificate before an innocent purchaser acquires it . We recommend that you keep a copy of both sides of your certificates separate from the certificates themselves. If a certificate is lost or stolen and then transferred on the books of the transfer agent to another owner, it may be impossible for you to establish ...

The Key Pieces of Information

Transfer Agent

The Importance of Documentation

• If you are inheriting securities, ensure the individual whose name is on the certificate has bequeathed it to you. A probated will with the necessary signatures of the executors may be required by the transfer agent before it will transfer ownership. Once the certificates have been delivered back to you in your name, you can deposit them with a bro...

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