Publicly traded companies generally work with SEC registered transfer agents to record transfers of securities, and maintain a current shareholder list. Transfer agents can perform many useful administrative “back office” tasks for companies which allow management to focus on the core business model. The most important work done by transfer agents includes:
Transfer Agents for Issuing and Cancelling Stock Certificates
Transfer agents keep track of a public company’s shareholders, including how their stocks are titled. Shareholders may own stock in certificate form, or in book entry. These might be titled in the name of an individual, a trust, corporation or LLC. Once that stock has cleared, the shares are held at the shareholder’s brokerage, or in “street name” in which case the shares will show up under Cede & Co., rather than under a specific shareholder.
Transfer Agents Resolve Issues with Lost, Damaged or Stolen Certificates
Transfer agents have specific processes for resolving issues of ownership when certificates are destroyed or misplaced. The process usually involves an affidavit, and posting a bond, in the event that someone else later claims to be the rightful owner.
Transfer Agents Can Serve as an Intermediary or Escrow Agent
Transfer agents can also serve as the public company’s payment agent. For instance, a transfer agent or “TA” can pay out dividends, or other distributions to shareholders. A TA can also send out proxy materials to shareholders, or assist in the exchange of shares in the event of a merger.
OTC Markets public companies seeking referrals to excellent SEC registered transfer agents can contact OTC securities lawyer Matt Stout at (410) 429-7076 or firstname.lastname@example.org.