In the context of business entities, scrip is evidence of a right to obtain title to a portion of a share of stock of a corporation. However, it does not constitute title to the stock itself. It is one alternative used by companies that decide not to issue fractional shares in connection with activities such as:

A company can issue scrip to replace fractional shares and permit the scrip to be exchanged for title to the company's stock once the holder aggregates enough scrip to equal one full share. Scrip is transferable, and investors can acquire script from multiple sources in order to assemble a full share of stock.

While scrip generally does not grant its holder any voting, dividend or liquidation rights, the board of directors can grant those rights if it wishes. The board of directors can also fix other terms of the scrip, such as making the scrip void if it is not exchanged by a certain date.

For more information on issues to consider when contemplating a stock split or reverse stock split, see Stock Split Checklist and Reverse Stock Split Checklist.