What Is a Shareholder Register?
A shareholder register is a list of active owners of a company's shares, updated on an ongoing basis. The shareholder register requires that every current shareholder is recorded. The register includes each person's name, address, and the number of shares owned. In addition, the register can detail the holder's occupation and their price paid.
The shareholder register is fundamental to the examination of the ownership of a company. A shareholder register is a term used in Europe and other parts of the world, while the term used in the U.S. is shareholder list.
- A shareholder register is an active list of owners of a company's shares, updated on an ongoing basis.
- Included in the register are the shareholder’s name and physical address, while some registers detail the last decade of shareholder transactions.
- The shareholder list is used for several purposes including mailing proxy materials, dividend payments, and tax purposes.
How a Shareholder Register Works
A shareholder register must note all shares issued by a company. In addition, it should detail any possible restrictions on transferring shares, along with relevant citations, if available. For each share class (e.g., Warren Buffet's Berkshire Hathaway Inc. BRK.A, BRK.B), the register must also list shareholders by name, in alphabetical order, and each party’s last known physical address.
Some shareholder registers go as far as to detail all issues of shares to each individual shareholder in the last 10 years, along with the date of any and all transfers of shares. This can also include the name of the party to whom shares have been transferred. The shareholder register should also include the purchase prices of these shares. If shares are not fully paid for, the register must note the unpaid amount.
Additional critical components of company record keeping include a current and projected capital structure. This document, often in an Excel file, details the financing of a company’s present operations and future goals for growth. Sources of funds can come from issuing equity (new shares of which would be noted in real-time in the shareholder register), and debt. Equity can be in the form of common or preferred stock, while debt can be short-term or long-term in nature.
Requirements for a Shareholder Register
The origin of a shareholder register is a clear record of beneficial owners of shares (shareholders, who are entitled to and may exercise voting rights attached to the shares, along with other particular rights and powers, and receive dividends). Access is free for current shareholders and may require a small fee for non-shareholders. This will allow communication to, and between, shareholders of information such as the price per share in a takeover bid.
Per the rules outlined by the Securities and Exchange Commission (SEC), a company must provide shareholders with the contact info of other shareholders in two instances. The first is proxy solicitations and the second is in a tender offer. A proxy solicitation contains information to be sent to its voting shareholders prior to a shareholder meeting. The solicitation might include information about the company and the items on the agenda that need a shareholder vote. A tender offer is a public offer or bid to purchase some or all of the shares in a corporation.
The company can either mail the list to the requesting party or send the materials directly to shareholders. Meanwhile, companies may provide access to the shareholder register per state laws or a company’s by-laws and charter.