Your public company’s future and reputation depend greatly on your relationship with its shareholders. Discover the key reasons for utilizing the services of a transfer agent for your public company.
Shareholder Record Keeping
A transfer agent keeps accurate and updated records of shareholders for your public company. This service ensures you communicate smoothly with them and also that your company and shareholders remain compliant with all of the relevant laws and regulations. This compliance helps you and your stockholders avoid legal consequences like fines and possible jail time.
Stock Issuance and Transfers
This service likewise handles the issuance of your company’s stock. It makes the stock readily available for people who want to invest in your business. This service additionally oversees investor transactions like buying, selling, or transferring ownership of your public company’s stocks.
Distribution of Dividends
Stockholders in your company expect timely distributions of any dividends owed to them. If your public company fails to pay out those funds quickly, you could risk your business’s reputation and future and the vital relationship you have with your shareholders.
A transfer agent service oversees the distribution of dividends. When you partner with this service, you ensure shareholders receive the dividends owed to them promptly.
Communication
As busy as you are as a business owner, you may lack the time to communicate effectively with people who own stock in your business. Still, they rely on communication from your company to determine whether or not to buy or sell stock.
Rather than take time out of your busy schedule, outsource this communication to a transfer agent. This agent will handle tasks like distributing notices and reports to shareholders. It will also ensure shareholders receive any proxy materials relating to their investments.
Management of Corporate Actions
The transfer agent you retain for your business will also manage its corporate actions. These agents specialize in overseeing activities like acquisitions, stock splits, and mergers. Having one available to you ensures a smooth process for these types of corporate activities.
Lost and Unclaimed Securities
This type of service will track and manage unclaimed or lost securities. Sometimes investors forget or lose track of the stocks that they buy.
They may also forget to claim dividends that your business owes to them. Rather than you taking the time to track them down, you can hire a transfer agent service to find those individuals and distribute lost or unclaimed securities to them.
Fraud Prevention
Fraud puts your business at risk of losing money and its good standing in the corporate world. A transfer agent helps protect your company from fraud. It can implement security measures to reduce fraudulent stock transactions and unauthorized transfers of shares.
Higher Investor Confidence
You instill more confidence in your investors when you partner your business with this agent. Shareholders will know they should receive dividends on time and also that the agent will protect their shareholder accounts from fraud and regulatory non-compliance.
These reasons highlight why you should partner your business with a transfer agent. You protect both your business and its shareholders. Choose a transfer agent service that has the services your public company needs to serve everyone involved.
