When companies become publicly traded, there are specific requirements that must be met with regards to record keeping of the ownership of the company stocks and, if applicable, the company bonds as well. The entity or individual responsible for keeping records of stock ownership is called a transfer agent, and if they also record all information, they are also known as the registrar.
It is possible for a company to keep these requirements on their own, and manage all record keeping requirements as outlined by the U.S Securities and Exchange Commission. While this is possible, it can also be a challenge, and most companies choose to outsource the role of a transfer agent to a specialized service. This is one of the services we offer at Colonial Stock Transfer, and we are registered with the Securities and Exchange Commission and have been since it first started its oversight role in 1987.
There are three major functions or jobs that the stock transfer agent completes. These include:
- Manage existing certificates – if a stock certificate is stolen, destroyed, or is somehow lost or damaged, the transfer agent is the individual to provide assistance in obtaining a replacement copy. There are specific steps that have to be followed in this process, and the transfer agent manages the steps and ensures all documentation required is obtained.
- Issue new certificates and cancel sold certificates – when companies split stock, the transfer agent is responsible for issuing the certificates for new shares. This includes keeping specific records on the purchaser and how the stocks are held. When stocks are sold, the transfer agent provides new certificates to the current owner and cancels certificates held by the seller.
- Paying agent – the transfer agent works as the intermediary for the company, providing payments to shareholders when necessary. They also act in other ways to manage the stocks and provide reports and information to shareholders.
For more information on our services as a transfer agent, call us today at 801-355-5740. Also follow on Twitter.