What is a Shareholder Register?
A shareholder register is a list of all active and former owners of a company’s shares. The register includes details of shareholders, such as their name, address, the number of shares they own, class of shares held, date when they became a shareholder, and when they ceased being a shareholder.
A company’s directors are required to update the shareholder register on an ongoing basis and ensure that every current shareholder is recorded in the register. The shareholder register serves as proof of ownership in the company, and it shows the number of shareholders in each class of shares.
Companies use the shareholder register to keep track of shares held by shareholders and contact them directly instead of going through a custodian bank.
- A shareholder register is a register of all the registered shareholders of a company.
- The information recorded in a shareholder register includes the shareholder’s name, address, class of shares, number of shares held, the price paid, etc.
- The shareholder register makes it easy for the company or other interested parties to contact shareholders directly.
How a Shareholder Register Works
Holders of registered shares of a company must be recorded in the shareholder register. The register is organized into share classes, where shareholders in each class of shares are listed alphabetically by their last name.
Apart from including the personal details of each shareholder, the register may retain a record of all shares issued to individual shareholders over past years, as well as transfers of shares and the name of the shareholder who acquired the shares. The register may be maintained either by the company itself or a third-party registry service provider.
A third-party registry service provider is tasked with maintaining and updating the register at an agreed fee. Since the shareholder register is a public document, third parties and other interested parties can access an updated list of a company’s shareholders at any time.
Requirements for a Shareholder Register
The shareholder register records the beneficial owners of shares. The beneficial owners of shares refer to the shareholders with voting rights attached to the shares. If a shareholder is entitled to the direct benefit of shares, the shares are classified as beneficiary held. Shares held in trust are classified as non-beneficiary since they are held for a third party.
Companies are required to provide the shareholder register for free to current shareholders, while non-shareholders may be required to pay a small fee. According to the U.S. Securities and Exchange Commission (SEC), companies must provide current shareholders with the contact information of other shareholders when the need arises – i.e., proxy solicitation and tender offer.
- Proxy solicitation is a request that authorizes another shareholder to cast a vote at a shareholder’s meeting. A proxy solicitation must be accompanied by a proxy statement, which includes the necessary information to help the shareholder make an informed vote when a specific agenda comes up during the shareholder meeting.
- A tender offer is an offer to purchase a part or all shares held by shareholders. When making a tender offer, a shareholder may require the contact information of another shareholder and send them a bid to buy part or all of the shares they hold at a specific price.
When providing access to the shareholder register, a company must follow its internal charter and bylaws and the state laws on the provision of shareholder information to third parties.
Contents of a Shareholder Register
A shareholder register should include information about the current and past shareholders of the company. Some of the information provided includes the name of the shareholder, physical address, date of inclusion in the register, number of shares held, class of shares, etc.
If there are any changes to the shareholder’s details, the register must be updated to reflect the new changes. The shareholder register also includes details about the issued shares of a company. The information added in the section includes the class of shares, the number of issued shares, the date when shares were issued, the share certificate number for each share, and the payment status of shares held by each shareholder.
When a shareholder transfers part or all of the shares, the shareholder register must be updated to reflect the number of paid and unpaid shares.
Gaining Access to the Shareholder Register
A shareholder register is accessible to shareholders and non-shareholders at any time. Shareholders may ask to gain access to the shareholder register and freely inspect any information needed. Non-shareholders may also request access to the shareholder register by providing details on the purpose of accessing the register and how the information shall be used.
The company may grant such a request if the register is intended to be used for a proper purpose and may require a small fee to provide a copy of the register. However, a company may decline to grant access to the shareholder register if the third party intends to use the shareholder register for an illegitimate purpose.
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