Companies and shareholders: introduction: evidence of ownership - registered shares
A company is required by law to maintain a register of members- a list of current shareholders, called the company’s share register. Shares whose ownership is recorded on the register are known as registered shares. The registrar is responsible for maintaining the register - in smaller private companies this is often the company secretary, but larger companies usually employ a specialist firm of registrars. The register must be kept at the company’s registered office, or some other office notified to Companies House. Any member has the right to inspect the register, without payment.
In order to record the name of the owner of a share, the registrar requires evidence of ownership in the form of either a share certificate or a stock account within the CREST settlement system (see STSM131050).
Share certificates are the documents issued by the company to the shareholder, certifying the details of ownership and bearing the name of the legal owner of the shares. That person may be the beneficial owner of the shares, or a nominee appointed to hold the shares on behalf of the beneficial owner. Use of nominees is a common and convenient way of managing an investment portfolio. Shares may also be held in ‘dematerialised’, electronic form in a member account in CREST.
The register must show the following particulars:
- the name and address of each member;
- the number and type of shares held by each member;
- the amount paid, or agreed to be considered as paid, for the shares;
- the date at which the person was registered as a member, and the date at which he or she ceased to be a member.
When registered shares are transferred from one person to another, it is necessary for the register to be altered to record the change of ownership. See STSM071060.
Not all shares are registered shares. Bearer shares are not listed on a share register. See STSM071050.