Share register

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The share register defines register whose the main purpose is to:

  • determine a basis for the exercise of shareholders' rights regarding the company, and
  • to supply the company shareholders, and
  • supplying other information in order to estimate the ownership structure of the company.

Every company has to maintain its share register. Moreover, the share register of a company has to include information about:

  • the shareholders' names,
  • the company numbers or another identification numbers,
  • information regarding each share's number,
  • personal ID numbers,
  • the class where each share belongs,
  • postal address,
  • the information if share certificates have been provided.

When all initiators have signed the memorandum of association so the share register should be prepared. Information concerning subscribed shares has to been entered instantly in the share register[1].

The shareholder in the share register

Whereas some person shows a share certificate or in another way supplies proof of her or his purchase so the board of directors or the person authorized through the board of directors should instantly enter such person like a shareholder in the share register. In another case when the shareholder or other authorized person notifies that a stated of circumstance in the share register has changed in some way so that change has to be noted in the register immediately.

Implements of the shareholders' rights

Implements of shareholders rights to the company are constrained through the information included in the share register so it means that the shareholder might not implement his voting rights unless he has been written down in the share register.

The share register has to be maintained:

  • for the time when the company exist,
  • for a term after the dissolution of the company which is not less than ten years.

After the dissolution of the company, the share register has been kept through the company 's liquidator[2].

The responsibility of the board of directors

The responsibility of the board of directors relies on ensuring that the share register is:

  • stored,
  • maintained and
  • made available for each person who wishes to review it.

If the company not maintaining the share register, so it can lead to the liquidation of that company or get fined if not remedied [3].

Examples of Share register

The share register is a record of shareholders and the shares they own in a company. It is used to keep track of who owns what in a company, as well as to determine who is entitled to any dividends or other benefits the company might offer.

Examples of Share Register include:

  • A hard-copy ledger that contains all information about a company’s shareholders.
  • An electronic register which is maintained on a company’s database and is typically updated when there are changes in the ownership of shares.
  • An online platform that allows shareholders to view their holdings, make changes to their accounts, and conduct transactions.
  • A web-based register that is set up by a third-party provider and allows shareholders to view and update their shareholdings.

Advantages of Share register

The share register is a list of all the shareholders of a company and the number of shares they own. It is an important document that provides a record of who owns a company and is used to track changes in ownership. The main advantages of the share register are:

  • It provides a record of the company’s shareholders, including the name, address, and number of shares owned. This helps to ensure accurate identification of shareholders and can also be used to contact them in the case of important updates or notifications.
  • It is an essential tool for companies with multiple shareholders, as it can be used to track any changes in ownership and to ensure that the correct individuals are notified of any significant developments.
  • The share register is also a legal requirement in many countries, so it provides a way for companies to comply with relevant laws and regulations.
  • Finally, it can be used to track the performance of individual shareholders, which is useful for understanding the growth of the company.

Limitations of Share register

The Share Register is a register that records the details of shareholders in a company, including the number of shares and the name and address of each shareholder. It is an important legal document and is used to calculate dividends, voting rights, and other matters related to the company's finances. However, it has some limitations, including:

  • Inaccuracies: Share registers can contain inaccuracies and errors, as they are manually filled out and updated. This can lead to incorrect information being recorded, which can cause significant issues for shareholders.
  • Security issues: Share registers are typically maintained in physical form, which can make them vulnerable to theft or other security risks.
  • Lack of flexibility: Share registers are typically paper-based, which makes them difficult to update quickly and accurately. This can be an issue when dealing with large numbers of shareholders, as the register can quickly become outdated.
  • Cost: Maintaining a share register can be costly, as it requires a dedicated staff member to manage and update it. This can be a significant expense for small companies or those with limited resources.

Other approaches related to Share register

The share register is a record of all the shareholders who own an equity stake in a company, along with their contact details. Other approaches related to the share register include:

  • Corporate Governance: The share register is a key element of corporate governance, as it allows the company to identify who owns a stake in the business and to ensure compliance with applicable regulations.
  • Taxation: The share register is also used to track the sale and purchase of shares and to ensure that the necessary taxes are paid.
  • Shareholder Rights: The share register is often used to ensure that shareholders are notified of important company events, such as annual general meetings, and that they are able to exercise their voting rights.

In summary, the share register is a vital record for companies, enabling them to track shareholders, ensure compliance, and ensure that shareholders’ rights are respected.

Footnotes

  1. (J.A. Gurria 2013)
  2. (E. Rusrie 2008)
  3. (B.H. Klose 2009)


Share registerrecommended articles
Stock ledgerDistribution statementMinute bookCompany sealExtraordinary general meetingStatutory meetingStatutory booksTax mapPurchases ledger

References

Author: Mateusz Gołda