Benefits of Using a Private Company Transfer Agent

by | Mar 22, 2019 | Financial Services

Many private companies are utilizing specialty services and enjoying the benefits of having a private company transfer agent. Usually, the shareholder numbers of privately-held companies are somewhat small, and stock activities aren’t high. Recordkeeping is primarily the responsibility of the company’s legal department or another company official. However, the task is essential, and it shouldn’t be done by someone who doesn’t understand the issues.

You can cause yourself a variety of issues if you don’t use a professional agent. For example, a shareholder who receives stock certificates has to know how to transfer his or her shares under the UCC, state, and federal rules. It’s challenging to do this without having an agent to help. Along with such, stockholders might lose their certificates, which can cause legal liabilities and issues for the issuer.

Sometimes, the problems mentioned earlier can be magnified under some circumstances. For example, if you have many employee shareholders using an employee ownership plan, activity is likely to increase, and you’re going to find it more challenging to keep everything current. Along with such, you may decide to go public at some point, so you need to ensure that your records are accurate.

What They Do

Primarily, a private company transfer agent issues shares to the employees maintains the stock ledger, replaces lost certificates, and processes transfers of shares. Sometimes, agencies offer other services, as well. These can include cap table management, SaaS, and more.


Hiring a transfer agent is beneficial because it can save you a lot of money. You don’t have to worry about legal ramifications if stock certificates are lost or fear that you didn’t follow all the rules. Along with such, everything is maintained and accurate in the book-entry system, which means all the information is readily available and easy to retrieve. For more information visit EquityTrack.

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