Expert: Steven Taylor - 8/12/2010

Question
I purchased 4 share certificates of Ontario-Woman Lake Gold Mines Limited totaling 32,500 shares at an auction. Is there any value to them or do I frame them & put them on the wall?
diana gardiner

Answer
Diana, it doesn't matter if the company has value or not, because buying certificates that way will not grant you ownership of the underlying shares.

Stock certificates are not bearer instruments. Unlike, say, a dollar bill, which can be spent by anyone that has possession of it, a share certificate cannot be sold by just anyone. They are numbered and usually have the owner's name on them for a reason. A certificate is not the actual shares - instead, they are somewhat like a receipt, or proof of ownership. The transfer agent/registrar actually maintains the shareholder list and to transfer ownership of the shares, a legal document of transfer has to be completed and signed by the owner. On a stock certificate, that is usually on the back.

If the original owner hasn't completed the transfer documentation naming you as the new owner, and the transfer agent has not been provided the complete documentation and completed the transfer, then you don't own the shares. Instead you own a piece of art, which is what auctions and other certificate sellers are required to disclose to buyers.