How are stocks transferred ?

Question

A friend of mine is worried her (I guess they are blank certificates?) from her old job could have been stolen from her house. She does not know, and neither do I, how stocks are given, transferred, or if they are even given out in some kind of blank ownership form where whatever person holds the literal paper they are on is the owner legally. Can anyone point us in the right direction for understanding stocks?

Answer 1

Most stocks these days are held in "book entry" form. That is, they are electronic blips tied to the brokerage account of the current owner. "Book entry" holdings are certainly more convenient, more secure,  and make for "no hassle" trades.

With physical certificates, transference requires delivery of the certificates. These certificates would have to be signed by the owner(s) and there would have to be a signature guarantee (kind of like a notary, but not exactly the same). Of course, signatures and guarantees can be forged. My advice would be to immediately notify the transfer agent that handles the stocks in question and follow whatever directions they give for replacing the certificates. I would also recommend opening up a brokerage account and holding the stock in book entry form in the future. Note that the transfer agent is always identified in stockholder literature and can also be obtained from the company's investor relations department.

Answer 2

I doubt she was ever given the stock certificates, if that is truly what you are talking about.  Her company has a broker that keeps the stock certificates for you and you can transfer them easily.  She would just need to check a 401K statement or work with her company to find out who the broker is.  Which ever broker she wishes to transfer her stocks to should do most of the leg work for you, she will just need to fill out a form or two.  The stocks would need to have an owner attached to them for tax purposes, so they would not just be blank.  Good luck.