Shareholder Register: Definition, Purpose & Key Information

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 directorsBoard of DirectorsA board of directors is a panel of people elected to represent shareholders. Every public company is required to install a board of 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.

Summary

• 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 classesShare Classshare classes are usually created from various types of shares in a company. The type of shares and share classes that a company can create, 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)Securities and Exchange Commission (SEC)The US Securities and Exchange Commission, or SEC, is an independent agency of the US federal government that is responsible for implementing federal securities laws and proposing securities rules. It is also in charge of maintaining the securities industry and stock and options exchanges, 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 bylawsCompany BylawsCompany bylaws are the rules that govern how a company is run and one of the first items to be established by the board of directors at the time a company is started. Such bylaws are created usually after the Articles of Incorporation are submitted 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.

Related Readings

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• Annual General Meeting (AGM)Annual General Meeting (AGM)An Annual General Meeting (AGM) is a meeting conducted annually where the members of an organization gather to discuss and vote on key issues. Public
• Proxy VoteProxy VoteA Proxy Vote is a delegation of voting authority to a representative on behalf of the original vote-holder. The party who receives the authority to vote is known as the Proxy and the original vote-holder is known as the Principal. The concept is important in financial markets and particularly with public companies
• Shareholder LetterShareholder LetterA shareholder letter is written by the executives of a company to its shareholders, providing a detailed overview of its operations and other
• Tender OfferTender OfferA tender offer is a proposal that an investor makes to the shareholders of a publicly traded company. The offer is to tender, or sell, their shares for a specific price at a predetermined time. In some cases, the tender offer may be made by more than one person, such as a group of investors or another business. Tender offers are a commonly used means of acquisition