If you operate a company, you will need to maintain a share register. Every company in Australia has directors who operate the company, and shareholders, who are its owners. Each shareholder will hold a certain number of shares in the company. This represents their ownership stake in that company. In Australia, proprietary limited companies may have up to 50 non-employee shareholders, so the number of shareholders in any given company may vary. It is not only important for each company to keep accurate records of its shareholders, but also a legal requirement. This article will explain:

  • what a share register is;
  • when you will need to update the share register; and
  • how to maintain the share register.

What Is a Share Register?

A share register, also known as a register of members, is the record of a company’s shareholders. The share register should contain each shareholder’s: 

  • name; 
  • address; and
  • date of addition to the register.

The share register must also show the: 

  • date on which every allotment of shares takes place and the number of shares in each allotment (namely, a share issuance or transfer);
  • number and class of shares that each shareholder holds; 
  • serial numbers or share certificate numbers (if any) of the shares; 
  • amount paid on the shares and whether those shares are fully paid; and
  • amounts unpaid on the shares, if any.

It is important to note that these details are legally required, so each company is required to include them in its share register. The share register should be kept with the company’s records. Usually, companies keep their share register at the company’s registered office.

When you register a company, you will usually receive a copy of the share register. You will then continue to update the share register as any changes to the company’s share capital occur. A company may also keep its share register in an online format.

You will also need to notify ASIC of any changes made to the company’s share register. This means that the company’s share register will also be reflected on ASIC and can be accessed by anyone online. It is important to note, however, that the ASIC record is not the formal share register of the company. Instead, the company must keep its own separate share register with its records.

When to Update the Share Register

You should update your share register any time there is a change to the company’s share capital or to a shareholder of the company. This includes updates for:

  • any issues of shares; 
  • a transfer of shares;
  • any reconstruction or other changes made to the company’s share capital (for example, a share buy-back or share class conversion); or
  • a change to a shareholder’s details, including an address change.

Once the company’s share register is updated, that is the point at which the event occurs. 

For example, in the case of a share issuance, the date of the issue is the date on which the company updates its share register. Following this update, you will need to notify of the changes made to the register (which for most changes will need to occur within 28 days).

The share register details should be provided for the preceding seven years, so any changes to shareholders and their shareholdings within the previous seven years should be included in the company’s share register. 

Maintaining the Register

As above, there are certain details which the law says must be kept and updated in a company share register. To properly maintain your company’s share register, you will need to accurately record certain details. 

Shareholder Details

When a new member becomes a shareholder in your company, you will need to include that shareholder’s full name in the share register. This will either be:

  • an individual’s name; or 
  • the company name and ACN. 

If the shares are held jointly, then the names of both joint shareholders should be included. Where a shareholder holds their shares in a trust, you should include the full name of the trustee and the trust itself in the share register.

The register should also note: 

  • the shareholder’s address; and 
  • when the shareholder was added to the register. 

Whether the shares are held in a trust should also be noted on the register.

If any changes occur with respect to a shareholder’s details, you will also need to make these updates. Where a shareholder changes their address, you should include the new address in the register. Additionally, if a shareholder name changes (but not as the result of a share transfer), both the new name and the old name should be included in the register.

Share Details

You should also include particular details with respect to the shares that each shareholder holds. Alongside each shareholder’s name, you should indicate: 

  • the number of shares and the class of shares that shareholder holds;
  • the price paid for those shares;
  • whether the shares are fully paid; and
  • the amount unpaid on the shares, if the shares are not fully paid. 

If any of your company’s shares have serial numbers, these serial numbers should be listed in the share register. This is also the case for any share certificate numbers, which you should include if applicable.

Whenever transactions happen that affect the company’s shares, you should update the share register for this. Where additional shares in the company are issued, you should update the relevant details for each shareholder. Where shares are transferred between shareholders, you should indicate the number of shares that the: 

  • transferring shareholder transfers; and 
  • transferee shareholder acquires. 

For any other matters which affect the company’s share capital, you should include the relevant details as applicable. This may include, for instance, a share conversion and the company should indicate the class of shares subject to the conversion and the conversion date. Where a reconstruction occurs, for instance a share buy-back and subsequent share cancellation, you should reflect this in the register by updating each shareholder’s share numbers.

Who Can Access the Share Register?

Any person is able to inspect a copy of the company’s share register. If a person who is not a shareholder wishes to inspect the company’s register, the company may charge for this inspection according to the fee set out in Schedule 4 of the Corporations Regulations. Any shareholder of the company may request an inspection at no cost.

If someone requests that your company provide them with a copy of the company’s share register, you must do so within seven days of the request. A person may only request the company’s share register for a proper purpose and must provide the company with the purpose of the request, in addition to their name and address.

Maintaining the Share Register vs. Maintaining the Capitalisation Table

It is important to distinguish between the company’s share register and its cap table (short for capitalisation table). Whilst the two share certain similarities, they are in fact different. Unlike the company’s share register, a cap table is not a legal requirement and there is no:

  • prescribed form which it must take; or 
  • information that it must contain (although cap statements are generally relatively standard across companies).

Like a share register, a cap table shows the company’s share structure. However, it will also include options and other securities which may convert into shares in the company. 

Legally, any issued options should also be recorded in the company’s option register, which is similar to the share register but records its issued options rather than its shares

The cap table will set out:

  • what each company shareholder owns; and 
  • the percentage of the company that they own. 

It also generally shows what that percentage will look like in the future, after the potential conversion of any convertible securities. Usually, a cap table is prepared in an excel spreadsheet or similar program. The company uses the cap table to help its investors and potential investors understand what their investment will look like. It also assists company directors with understanding the big picture of their share structure and other company securities. 

Who Is Responsible for Maintaining the Share Register?

As a company, you are responsible for maintaining an up-to-date share register. This obligation ultimately falls on the company’s directors to uphold. The company may have its accountant or another party manage and maintain its share register, and there are several businesses which provide share registry management services to companies in Australia.

Even where the company has someone else who is responsible for maintaining its share register, the directors will still be responsible for ensuring that this is done correctly. As a company director, each person has duties to ensure that the company complies with its legal responsibilities and requirements. Given that maintaining the share register is a legal obligation, the company’s directors will continue to ultimately be responsible for this even where they outsource the management of the share register.

Key Takeaways

A share register is an important company document. The share register contains particular details of each shareholder and their shares in the company. Legally, every company must maintain a share register. As a company director, it is important to ensure that your company keeps the proper records of each shareholder and their shareholdings in the share register. When any changes are made to the company’s shareholders or shareholdings, you should update the share register to reflect this. After the changes are made to the company’s share register, you will also need to notify ASIC that those changes have been made. If you require any assistance with maintaining your share register, or are unsure what details to include, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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