A premature issuance of stock may be ratified after the fact as valid under Section 205 of the Delaware General Corporation Law, the Court of Chancery has ruled.

Writing in In re Certisign Holding, Vice Chancellor John W. Noble said Section 205 gives the Court of Chancery the power to “declare that a defective corporate act validated by the court shall be effective as of the time of the defective corporate act and to make such other orders regarding such matters as it deems proper under the circumstances.”

He entered a partial judgment on the pleadings in favor of petitioners seeking an order that the prematurely issued stock was valid.