Transfer agents are perhaps best known for the work that they do for publicly traded companies. But it isn’t just public companies that benefit from a relationship with a transfer agent. A transfer agent can help private companies that have issued stock with maintaining records of share ownership, as well as administering related processes, such as dividend payments and proxy mailings.
If you are, or you represent a private issuer, you too have good reasons to partner with a transfer agent for your recordkeeping needs:
Good governance practices
Even though your company may not be listed on an exchange and shares may only trade via private sale, you may still be obligated to meet many of the same governance requirements of a publicly-traded company:
- Maintain a record of securityholders and their ownership positions and history
- Keep track of records for tax reporting if you pay cash or stock dividends
- Manage proxy solicitation and voting if your company holds an annual securityholder meeting
We believe that corporate records should be administered in the best interests of the company, employees, securityholders and prospective new investors. By retaining a trusted independent service provider to handle these tasks, you free up resources within your company to focus on your core business initiatives.
Data security
A good transfer agent provides strong data security to protect your securityholder records from hackers and other threats. This is an important factor, as both you and your securityholders may want the convenience of having online access to company information and account holdings. Transfer agents are held to rigorous auditing standards by OSFI to ensure sensitive data remains secure.
This affords an opportunity to provide your securityholders, potential investors and management team with the comfort of knowing that these records are safe.
Expertise
Transfer agents have significant expertise in administering securityholder records and matters of governance and compliance.
This expertise helps provide assurance to your investors that their records are protected and managed in the same manner as large public corporations. Regulations change often and transfer agents work hard to keep their clients informed of new developments. A transfer agent can help ensure that management of your records conforms to the latest requirements.
Additionally, should your company decide to go public down the road, your transfer agent can assist with managing the initial public offering (IPO) process and your other future needs as a public company.
For the most part, the needs of a private company may not be as complex as those for a publicly traded entity. However, working with a transfer agent can help you reduce the risks associated with securityholder records and free you up to manage and grow your business. While they’re not glamorous functions, regulatory compliance and securityholder recordkeeping are essential for the success of your company.
To learn more about transfer agent services for private companies, please visit
computershare.com.