A transfer agent performs a number of tasks for publicly traded companies. But that simple explanation sells a transfer agent’s function a little short. It’s not just public companies that benefit from a relationship with a transfer agent. Private issuers, too, have good reason to partner with a transfer agent for their recordkeeping needs.
If you’re at a private company, your first question may be, “What the heck IS a transfer agent anyway?” If you type “transfer agent” into a Google search, you’ll get a little info about stock transfer agents, but it will be dwarfed by news stories about the trade and free agency market for English Premier League soccer.
Good governance practices
- You certainly want to have a record of shareholders and their ownership positions and history
- You need to keep track of records for taxes if you pay cash or stock dividends
- You need to manage proxy solicitation and voting if your company holds an annual shareholder meeting
For the most part, the needs of a private company are not as complex as those for a publicly traded entity. However, working with a transfer agent can help you reduce the risks associated with shareholder records and free you up to manage and grow your business. While they’re not glamorous functions, regulatory compliance and shareholder recordkeeping are essential for the success of your company.