Assembling a shareholder register when issuing share capital can be confusing — here we walkthough how share registers work.
When a company decides to issue share capital, it’s required to maintain a record that is referred to as a “register of members” or a “shareholder register”. The Corporations Act 2001 outlines this requirement, and dictates that a company must record information that includes the members and shareholders of a company and must retain in an accessible manner to ASIC at the company’s registered office.
Members of a company can typically access this information for free, but non-members may be required to pay a fee to access share register information via a company extract. Companies that issue share capital are typically required to provide a copy of a share register within seven days of request.
What Information Should a Share Register Include?
- The shareholder register of a company should include the following information about members:
- Name and address
- Date of inclusion in the share register
- The number of shares held by the member
If the details of any member change, the register must be updated accordingly.
- A share register must also include the details of issued shares. These details include:
- The number of shares issued
- The class of shares issued
- The date upon which the shares were issued
- The share certificate number or share number for each share where applicable
- The payment status of shares. If shares are fully paid, a company share register must reflect the total unpaid amount on shares
Should the details of shareholdings or shares change, the share register must be updated accordingly.
What Are Beneficially Held Shares?
A shareholder register must clearly state when shares are beneficially held — but what are beneficially held shares?
If a shareholder or the owner of the shares in question is entitled to the direct benefit of the shares, then the shares are classed as beneficially held. If shares are held on behalf of a trust, these shares are classed as non-beneficially held as they are held for a third party. Corporate trustees are always featured on the share register rather than their trusts for instance.
What Does ASIC Need to Know?
The ASIC requires specific information regarding shareholder registers. A company may need to provide ASIC with information regarding the members or shareholders of a company if it is not a public company.
Proprietary companies with more than 20 members typically only need to provide ASIC with information on amendments to the top 20 members of each share class. It’s also essential to inform ASIC if a company cancels shares, makes changes to the share structure of the company, or issues shares.
Maintaining an accurate shareholder register is extremely important regulatory compliance — failing to make appropriate changes to a share register or failing to comply with accurate record-keeping could potentially result in an offence of the Corporations Act with unnecessary late fees or penalties. If you’re currently in the process of assembling or updating a share register and require guidance, get in touch with Fullstack today.