A stock certificate is simply a special document issued by a corporation to a stockholder that represents the stockholders’ shares – it provides the name of the registered holder, the number of shares and bears the signature of certain corporate officers. Because it represents a legal equity interest in a corporation, if a stock certificate is lost it must be replaced before it can be transferred to another holder or tendered for consideration if the company is purchased. This can be a time-consuming and costly process for both the company and the stockholder.
However, Delaware allows for uncertificated shares and electronic books and records – that means that the issuance of shares can be reflected in the books and records of the company and the company does not have to issue physical certificates.