Understanding Registered Shares: Ownership and Transfer
Registered Shares and Ownership
A registered share represents ownership in a company, and the name of the owner is recorded on the share certificate. This distinguishes them from bearer shares, which have no specific owner named on the certificate.
Benefits of Registered Shares
- Provides a clear record of ownership, making it easier to transfer shares.
- Offers more protection against fraud, as the company can verify the identity of the shareholder.
- Enables the company to communicate directly with shareholders and send voting materials.
Transfer of Registered Shares
When a registered share is sold, the new owner must be registered with the company. This involves:
- Completing a share transfer form
- Submitting the form to the company's registrar
- Paying any necessary fees
Once the transfer is processed, the new owner's name will be entered into the company's shareholder register.
Differences between Registered and Bearer Shares
The key difference between registered and bearer shares lies in ownership registration. Registered shares have the owner's name recorded on the certificate, while bearer shares do not.
Advantages of Registered Shares
- Increased security against theft or loss of shares
- Easier to track ownership and prevent unauthorized transfers
Disadvantages of Registered Shares
- More complex and time-consuming transfer process
- Higher fees associated with share transfers
Shareholder Registers
Companies maintain shareholder registers that record the names of all active and former shareholders. These registers include details such as:
- Shareholder name
- Number of shares held
- Date of share acquisition
Shareholder registers are an essential record for corporate governance and enable companies to communicate with their shareholders.
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