What is a Stock Transfer Agent?
Companies that have publicly traded securities typically use stock transfer agents to keep track of the individuals and entities that own their stocks and bonds. Most stock transfer agents are banks or trust companies, but sometimes a company acts as its own stock transfer agent.
Stock Transfer Agents perform three main functions:
Issue and cancel certificates to reflect changes in stock ownership. For example, when a company declares a stock dividend or stock split, the stock transfer agent issues new shares. Stock transfer agents keep records of who owns a company?s stocks and bonds and how those stocks and bonds are held?whether by the owner in stock certificate form, by the company in book-entry form, or by the investor?s brokerage firm in street name. They also keep records of how many shares of stock or bonds each investor owns.
Act as an intermediary for the company. A stock transfer agent may also serve as the company?s paying agent to pay out interest, cash and stock dividends, or other distributions to stock- and bondholders. In addition, stock transfer agents act as proxy agent (sending out proxy materials), stock exchange agent (exchanging a company?s stock or bonds in a merger), stock tender agent (tendering shares in a tender offer), and mailing agent (mailing the company?s quarterly, annual, and other reports).
Handle lost stock certificates, destroyed stock certificates, or stolen stock certificates. Stock transfer agents help shareholders and bondholders when a stock or bond certificate has been lost, destroyed, or stolen. If this happened to you please contact TransferOnline.com.
Why hire a Stock Transfer Agent? Most public or private companies with shareholders choose a professional stock transfer agent to act as custodian for their shareholder records, and to handle any changes in shareholder ownership. Purchasing the necessary software solutions to handle the processing and recordkeeping, and hiring someone with the corresponding expertise in corporate securities and compliance is an expensive undertaking - one that transfer agents are able to leverage over multiple issuers. The transfer agent also makes sure that the company meets and stays in compliance with the rules of the Securities and Exchange Commission.
For a more comprehensive definition of a transfer agent and how Transfer Online, Inc. can best serve your company's stock transfer agent needs, please visit TransferOnline.com.
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