Meaning
Legislative authority within the state code governing the methods by which a corporation may execute and deliver certificates of stock. Under delaware dgcl section 106, the signatures of company officers on a stock certificate may be manual or facsimiles. This rule facilitates the issuance of equity in financing rounds where physical presence is impractical.
It ensures the validity of the instrument regardless of the modern technology used for the impression.
Signature Protocol
Modern administrative efficiency depends on the ability to use electronic or stamped signatures for high-volume tasks. While the delaware dgcl section 106 allows for facsimiles, the corporation must still ensure the signatures represent the authorized officers defined in the bylaws. This section provides the legal foundation for the validity of securities issued by the board.
Corporate Authority
Board resolutions typically cite this statute when authorizing a new class of shares or a mass issuance to investors. The delaware dgcl section 106 removes the potential for a technical challenge based on the physical nature of the officer’s mark. It bridges the gap between traditional paper-based corporate records and the requirements of digital-first investment environments.
Instrument Validity
Shareholder rights are protected by the certainty that their certificates are legally binding documents under state law. Even if an officer leaves the company before the certificate reaches the holder, the delaware dgcl section 106 preserves the validity of the facsimile signature made while they held office. This stability is vital for the secondary market and for the internal record-keeping of the venture.
