Companies with stock and shareholders need to follow specific requirements for reporting and management. In addition, it is essential for these companies to be able to provide information to shareholders on a timely and as-needed basis.
This is a time consuming and often complex part of the business, and most companies do not manage this internally. Instead, they outsource this service to a transfer agent, who also provides services as a registrar.
The Basic Role of a Transfer Agent
It is easy to think of the transfer agent as the specific entity or individual that is appointed by the company to retain and maintain all of the records for the security owners of the business. This is essential during the initial offering of certificates for securities, but it is also needed on an ongoing basis.
The transfer agent manages all of the certificates, including canceling certificates, if securities are sold and issuing new certificates to reflect the new ownership of the security.
In most cases, the transfer agent also provides the link between the security holders for the company and the company management. As a third-party, they are neutral in decision making on behalf of either security holders or the business.
The Role of the Registrar
In almost all situations, the registrar and the transfer agent are the same entity, which is typically a third-party service provider. The role of the registrar is different from that of the transfer agent and includes recording and maintaining a ledger (the register) of the issuers for each of the securities.
The register must include the individual or entity that owns the security, as well as personal or corporate information such as the address, social security number (for individuals), or the tax identification number (for entities).
If you require the services of a transfer agent and registrar, get in touch with Colonial Stock Transfer at 801-355-5740. Also follow on Facebook.
