What is Required in My Members Register and Share Certificates?

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Table of Contents

• Creating Shares – Members Register
• Share Certificates
• Serial Numbers
• Notifying ASIC
• Key Takeaways

If you have agreed to issue shares to a new shareholder, you might be wondering how to create those shares. All private companies must keep a register of shareholders as per the Corporations Act 2001. This article will guide you through the process of creating shares and outline the necessary steps for generating your share certificates.

Creating Shares – Members Register

As a private company, you are required by the Corporations Act (the Act) to keep a register of shareholders. This is commonly known as a members register. Once you have agreed to issue shares to a new shareholder, you must seek approval from the requisite board or shareholders. After obtaining approval, it is essential for you to enter specific details into your company’s members register. The shares in your company are created by making this entry intoyour members register.

 For each new entry, your members register must include the following:

• name and address;
• date of entry into the register;
• each date of allotment of new shares;
• number of shares held by each member;
• class of shares;
• amount paid on the shares;
• whether or not the shares are fully paid; 
• amount unpaid on the shares (if any); and
• beneficial ownership status of the shares.

Beneficial Ownership

If your shareholder holds shares on behalf of another person or entity, such as a trust, they hold them beneficially for that person or entity’s enjoyment. In contrast, if your shareholder holds their shares personally or as a company, they own the shares for their own enjoyment. In these circumstances, those shares are therefore considered non-beneficially owned.

Share Certificates

After recording the share allotment in your members register, you must issue a share certificate within two months of allotting shares. You must include the following information in each share certificate you issue:

• company’s name;
• fact that the company is registered under the Act;
• class of shares; and
• amount unpaid on the shares (if any).

Serial Numbers

If all the shares you have issued in your company are fully paid, you do not have to record a serial number for each share allotted to your shareholders. However, if you prefer to include serial numbers for the shares, you can do so without any restrictions. 

When assigning serial numbers, you must allot each share a unique number within a class. This number must be from the total shares within a specific class. You will need to record these serial numbers in the members register. Likewise, record the serial number on the respective share certificates for each shareholder.

You must add one share to the serial number of the previously issued share, as the last serial number has already been accounted for. 

For example, suppose John is issued the first 6 shares in the Company XYZ Pty Ltd, followed by 4 shares being issued to Jessica and another 4 to Jane.

Notifying ASIC

You must lodge specific forms with ASIC when you make changes to your members register. The most common ASIC Form you are likely to encounter is Form 484, which will notify ASIC of: 

• a change of company’s address;
• the appointment or removal of a company director or secretary;
• a change to the name or entity of a shareholder;
• the issuance of new shares; and
• the transfer of shares amongst shareholders or to third parties.

Note that you must ensure timely submission of Form 484 to ASIC within 28 days of the change in your members register to avoid paying late fees.

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Key Takeaways

When you issue shares in your company, you will need to update your members register accordingly and issue each shareholder with a share certificate. Likewise, when a shareholder ceases to be a member, you must also make changes. In particular, record the date they cease to be a member of the company in your members register, request they return their share certificate and update ASIC.

If you need help understanding and issuing shares in your company, our experienced startup lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.