If stock certificates are lost, a stock power of attorney provides evidence of the transaction.
Sometimes known as a stock power of attorney, a stock power of attorney is a document used when registered securities are transferred from the current owner to a new owner. The data contained in the document is very similar to the information found on the back of the stock certificate itself, a fact that has led some investors and brokers to refer to the power certificate as a certificate of attribution separate from the certificate. The main advantage of a power certificate is that it sets out the details of the transfer of ownership in more detail, providing additional security for both the buyer and the seller.
To some extent, a power of attorney works like a limited power of attorney. The document authorizes and documents the transfer of a particular title, including details about the terms of the transfer. For example, a stock power can be drawn up as part of the transfer of stock from a parent to a child, as well as when the stock is sold to a buyer.
There are some advantages to using a common potency. One has to do with duplication of the terms of the transaction. All information entered on the back of the security certificate is also found on this document. In addition, other relevant details are often included in the energy inventory data that help establish a history of initiation, processing, and completion of transactions. This attention to detail makes it much easier to determine the conditions that existed at the time the transfer was made, and can often help avoid disputes from third parties who might object to the transfer.
Another benefit of the power of inventory is that the details in the document provide a greater sense of security for both parties involved in the transaction. The nature of the document requires that all processes involved in the transaction comply with the applicable regulations in the jurisdiction where the transfer is made. This means that the rights and privileges of both parties are defined as part of the documentation, which helps minimize the chances of either party later claiming that the transaction is invalid due to failure to fully disclose relevant information. .
In situations where stock certificates are lost or misplaced, a stock holding can provide evidence that the transaction took place. The details provided in the document can help establish when the transfer was made, the nature of the securities involved, and how many shares were included in the transaction. Therefore, the document can help to clearly establish who is the rightful owner of the shares and allow the issuer of the securities to issue replacement certificates to present to the proper owner.