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Stock certificates are generally divided into two forms: registered stock certificates and bearer stock certificates. A registered stock certificate is normally only evidence of title, and a record of the true holders of the shares will appear in the stockholder's register of the corporation. A bearer stock certificate, as its name implies is a bearer instrument, and possession of the certificate entitles the holder to exercise all legal rights associated with the stock.
Bearer stock certificates are becoming uncommon: they were popular in offshore jurisdictions for their perceived confidentiality, and as a useful way to transfer beneficial title to assets (held by the corporation) without payment of stamp duty. International initiatives have curbed the use of bearer stock certificates in offshore jurisdictions, and tend to be available only in onshore financial centres, although they are rarely seen in practice. There is a common myth that all Nevada Corporations are Bearer Stock Corporations. There is an equally common myth that by simply handing your stock to someone else will protect the corporation if it is sued or you have a judgement and liens agaist it. As one lawyer put it, "if you commit fraud or cause injury to another person as an officer of the company, it does not matter who owns (or holds) the stock, the judge is comong after YOU and anything you own or might ever own". One asset protection expert stated that "the odds that you can use bearer stock to hide your assets from the courts is the same odds as hitting the lottery for $100 million. In can happen, but is it a risk you want or should take?" As with the rest of the issues in setting up a Nevada Corporation, the more complex your needs, the more complex your business enterprises, the more you need professional legal, accounting and tax advice. This information is presented only to assist you in knowing what questions you need to ask your lawyer or accountant. Postal Plus Express does not provide Legal or Tax advice. |