Businesses everywhere tend to employ companies that offer specialty services, whether because they aren’t large enough to hire in-house or prefer to outsource. You’ll find that a private company transfer agent is an excellent option, especially if you don’t know how or don’t want to take the time to do the work yourself.
Small Stocks
Many times, privately owned businesses have fewer shareholders and may not have high stock activity. Therefore, officials and legal counsel may handle the recordkeeping as it pertains to stocks. However, your staff may not be trained on how to do it, which means things could be done incorrectly and you could still be held accountable. While you can hire a legal team to do it for you, they may cost more.
Investor Problems
If you do not hire a private company transfer agent, the issuers can cause more problems for investors. The shareholder that receives a stock certificate has to know about transferring their shares fairly and legally. The federal, UCC and state rules are complicated and may not be well-known to regular shareholders. Therefore, they may require the use of a qualified and affordable guide to help them through the process.
Lost Certificates
While you may not hear stories about it, many shareholders lose their certificates, which can create legal liabilities and confusion among others, including the issuer. Therefore, it makes sense that if they are lost, the agents you hire to help will take care of it, ensuring that things are still legal and everyone gets what they are entitled to.
What They Do
These agents are there to issue the shares, maintain your ledger, process any transfers according to the rules, and replace any lost certificates. You can save a lot of money by using a private company transfer agent and reduce your liability. For more information visit Colonial Stock Transfer Company, Inc.
