Many private businesses and smaller companies are utilizing a transfer agent for many benefits. While private and small businesses have a lower number of shareholders and stock activity isn’t as high, recordkeeping can still become quite difficult. In some cases, they aren’t sure how to do it and end up failing, which means they could be held legally accountable for the mistake with regard to fines and possibly jail time. Therefore, it makes sense to hire someone who knows what they’re doing without spending too much.
Not Using One
Issues that don’t choose a transfer agent could cause a variety of problems for the investors. For one, shareholders who receive these stock certificates must understand share transferring during a private sale. There are rules in place, including federal and state, that requires them to do it correctly. A professional can guide them through the process, and if you offer the services of a professional, more shareholders are likely to use the service.
Likewise, you may find that a shareholder loses their certificate and one must be reissued.
What They Do
These agents can handle a variety of situations. For example, they can issue the stocks to the appropriate people, maintain the ledger, process share transfers and even replace lost certificates.
These agents can help you save a lot of money. You won’t have to deal with all the legal fines associated with not selling correctly. Plus, you will enjoy an electronic system for entering the information, as the professional is likely to have that available. You won’t have to deal with a paper filing system where things get lost and misplaced frequently.
A transfer agent can make life a little simpler, especially where stock certificates are concerned. Visit Colonial Stock Transfer Company, Inc. today for more information.
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