Stock Register

The Stock Register is a record of stock transactions for a company.  Data that is tracked by the CMS includes number of shares transacted, date of the transaction, name and address of the buyer and seller, date the certificate was actually transferred, and other important information.

Maintaining a record of shareholders is essential as they are the owners of the corporation.  (Stockholder and Shareholder are synonymous.)  Common stockholders usually have voting rights.  Which types of stock have voting right is established in the corporation’s bylaws and can be changed by a decision of the shareholders and/or directors.   Shareholders determine who is on the board of directors and validate many of the actions of the directors.  The number of votes each shareholder has depends on the number of voting shares a stockholder possesses.  Normally there is one vote per voting share of stock so if a shareholder owns two thousand voting shares of stock, that person has two thousand votes at shareholder meetings.

Stockholders are also entitled to dividends, which is a portion of the profits of the company.  The board of directors determines the amount of profit that will be dispersed to stockholders and the amount that will be retained in the company as ‘retained earnings’ for the purpose of growing the company.  Dividends are based on the number of shares a stockholder owns.  If one person owns fifty percent of the stock, that person is entitled to fifty percent of the dividends. But once again, who receives dividends is normally established in the bylaws and it can be modified by the shareholders and/or directors.

Each state and the Securities and Exchange Commission have rules for the issuance of stock as well as rules governing shareholder voting, meetings, etc.  To ensure that a corporation is in compliance with the rules of governing agencies it is important to get the counsel of a corporate attorney and/or CPA in the state of incorporation.

Stock Certificates are documents showing ownership in the corporation.  The certificate shows the number of shares, par value, class of stock, and voting rights and it has a number unique in the corporation that is used to track the ownership of shares.