Difference between Share Certificate and Share Warrant
Share certificate and share warrant are two types of financial instruments that represent ownership in a company.
The main difference is that share certificate is a physical document that proves ownership of a certain number of shares in a company while a share warrant is a financial instrument that gives the holder the right to purchase shares in a company at a future date at a pre-determined price.
Before we move to the differences, let’s understand what are Share Certificate and Share Warrant:
- Share Certificate: Share certificate is a physical document that is issued by a company to its shareholders as proof of ownership of a certain number of shares in the company.
- Share Warrant: Share warrant is a financial instrument that gives the holder the right, but not the obligation, to purchase shares in a company at a future date at a pre-determined price.
Now, let’s move to Share Certificate vs Share Warrant:
Major differences between Share Certificate and Share Warrant
| Share Certificate | Share Warrant |
|---|---|
| Share certificate is a physical document that proves ownership of shares. | Share warrant is a financial instrument that gives the holder the right to purchase shares. |
| Share certificate is issued by the company at the time of purchase of shares. | Share warrant is issued by the company at a later date. |
| Share certificate is transferable. | Share warrant may have restrictions on transferability. |
| Share certificate is generally used to raise capital. | Share warrant is generally used as a form of call option. |
| Share certificate holders are considered shareholders. | Share warrant holders are not considered shareholders. |
That’s it.
Note that sometimes, the question might also be asked as “distinguish between Share Certificate and Share Warrant”.
Also see:
- Difference between Sol and Gel
- Difference between Group Behavior and Individual Behaviour
- Difference between Coaching and Tuition
Final words
Share certificate and share warrant are two different financial instruments that represent ownership in a company. Both have different characteristics and are used for different purposes.
Understanding the difference between share certificate and share warrant is important for making informed investment decisions.
You can view other “differences between” posts by clicking here.
If you have a related query, feel free to let us know in the comments below.
Also, kindly share the information with your friends who you think might be interested in reading it.
