A stock certificate is tangible evidence of the share it represents. A person who wishes to sell his shares of stock would normally be required to deliver the stock certificates to the buyer. A person who wishes to pledge his shares would also be required to deliver the stock certificates to the pledgee.
If the stock certificates are lost, stolen, or destroyed, the corporation cannot simply issue new stock certificates in the name of the stockholder. The Corporation Code provides the procedure for the replacement of a lost, stolen, or destroyed stock certificate. These are:
(1) The registered owner of the lost stock certificate (or his duly authorized representative) must file with the corporation an affidavit of loss. The affidavit of loss must be executed in triplicate and must set forth the following: (a) the circumstances as to how the certificate was lost; (b) the number of shares represented by the certificate; (c) the serial number of the certificate; and (d) the name of the issuing corporation. He must also submit such other information and evidence which he may deem necessary.