Overview on Shareholder's Regsiter

A list of all active shareholders of a company is updated regularly and comprises the shareholder register. It contains all current details such as the investor’s name, address, and the number of shares owned by them. Additionally, the shareholder register also includes details such as the shareholder’s occupation, and the price paid for share ownership.

The shareholder register is important when examining the company’s ownership. It is a common term in Europe and other parts of the globe. However, in the United States, it is commonly referred to as the shareholder list. The shareholder register is used for multiple purposes such as dividend payments, taxation, and mailing proxy materials. The shareholder list also includes details on shares such as - the class of shares held, the date of share issues, the share certificate number, payment status of shares, the date of inclusion, and also the date that shareholders cease being shareholders.

The company’s director is responsible for ensuring the shareholder’s register is updated on an ongoing basis. Organizations use the shareholder's list to directly contact shareholders instead of approaching them through the custodian bank.

How a Shareholder Register Works

Companies issuing shares are required to record all shareholder details in the shareholder register. Additionally, it is required that the shareholder register details all possible restrictions on transferring shares as well as all available relevant citations. The register is also required to list all names in alphabetical order along with the last known physical address of the shareholders for all share classes.

Some companies have shareholder registers that detail issues of all shares to individual shareowners for the last decade in addition to the dates of any share transfers. This may also include the name and details of the new shareholder to whom the shares may have been transferred. In case of partial payment, the shareholder register is required to make note of the amount due.

The two critical components of a company’s record-keeping include the current and project capital structure of the firm. This is often documented in an Excel file and includes all financial details of a company’s operations in the present day as well as the future growth goals of the organization.

Funds raised by the firm can have their source from issued equity, which are new shares issued to shareholders and noted in real-time in the shareholder's register. The two common forms of issued equity can be common or preferred stock, whereas debt can be either long-term or short-term.

Companies work with a third-party registry service to maintain and update the shareholder register at an agreed-upon fee. As the shareholder register is a public document, other interested parties and third parties can access the updated list of a company’s shareholders at any given point in time.

Requirements for a Shareholder Register

The shareholder register is required to be a clear record of all beneficial owners of the shares issued by the company. The shares may entitle the shareholder with the right to exercise their voting rights, along with any other particular rights and powers associated with the ownership of the shares. They may also entitle the shareholder to receive dividends.

The shareholder register can be accessed freely by all current shareholders and may require a small fee to be paid to be accessed by non-shareholders. This guarantees open communication of information, such as price per share in a takeover bid to and between all shareholders.

As per the Securities Exchange Commission, a company is required to provide shareholders with all the contact information of all other shareholders under two conditions. The first condition entails the scenario of proxy solicitations, while the second is in the scenario of a tender offer. A proxy solicitation contains information to be sent to all voting shareholders before a shareholder meeting.

The solicitation may include company-related information and any other agenda to be voted upon by shareholders. It is also a request that allows or authorizes another shareholder to cast a vote at a shareholder’s meeting. The proxy solicitation must be accompanied by a proxy statement, that makes note of all critical information to assist a shareholder to make an informed voting decision during the shareholder’s meeting on a specific agenda.

A tender offer refers to a public offer or a bid to purchase some or all of the shares in the corporation. Shareholders when making a tender offer may need the contact information of another shareholder to send them a bid to buy either a part or all f their shares at a specific price.

Companies can either choose to mail the shareholder list to the requesting party or send the necessary materials to the shareholders directly. Companies also may provide access to the shareholder register as per the governing state laws or the by-laws and charter of the company.