When a company issues share capital, it must keep a record known as a ‘register of members’ or ‘share register’. This is a legal requirement set out in the Corporations Act 2001. The register must contain information about the members/shareholders of the company and can be accessed by anyone. If you are a member of a company, this inspection is free. If you are not a member, you may need to pay an inspection fee. A company is typically required to provide a copy of the register following the request within seven days.
What Information Does the Register Include?
A share register must include the following information about members:
- Date of inclusion in the register; and
- Number of shares held by that member.
When a member changes their personal details, this must be recorded in the register.
Regarding the issued shares, the register must include information on the following:
- The date of issue of the shares;
- The number of shares issued;
- The class of shares issued;
- The share or share certificate number for the respective shares (as applicable); and
- Whether the shares are fully paid. If the shares are not fully paid, the register will need to reflect the amount unpaid on the shares.
Any changes to the shareholdings/shares are required to be made in the share register.
Are the Shares Beneficially Held?
The register must state whether or not the shares are beneficially held. So what exactly does this mean? Beneficially held means that the owner of the shares (i.e. the shareholder) is entitled to the direct benefit of the shares rather than if they were held on behalf of a trustee or nominee. In these cases, the shares would be non-beneficially held as they would be for the benefit of someone else.
What Do I Need to Send to ASIC?
You may need to provide ASIC with information about the members/shareholders on the register (except public companies).
In the case where a proprietary company has more than 20 members, then ASIC only requires information on the amendments to those of the top 20 members of each share class.
ASIC will also need to be informed if a company issues or cancels shares and/or makes changes to the company share structure.
If you are issuing shares in a company or making changes to the share structure, you will need to ensure you make the appropriate changes to the share register. This is a legal requirement and an offence of the Corporations Act not to comply with this requirement.
If you require assistance with company secretarial duties, LegalVision can assist. Get in touch with one of our commercial lawyers today on 1300 544 755.
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