Securities register

What the securities register records

The Companies Act requires a company to establish and maintain a register of its issued securities. For a small private company, the most familiar entries concern its shares. Securities is the broader legal term, so share register is useful shorthand in that context rather than a complete description of every possible security.

The required information depends on the securities and applicable rules. For certificated shares, relevant particulars include the holders' names and addresses, the number of securities and information about restrictions. Entries must be consistent with the classes and rights that the company is legally authorised to issue.

Beneficial ownership requirements add further information obligations in the circumstances prescribed by the Act and regulations. A non-affected company's register must include the prescribed beneficial owner information. The company should establish its classification and use the applicable requirements instead of treating an informal shareholder spreadsheet as automatically sufficient.

Why the register needs a supporting history

The register is central when checking ownership, preparing shareholder decisions or handing over company records to a buyer. It is not enough to know the latest names if the company cannot explain the share issues or transfers that produced those entries. Keep the transaction documents and relevant approvals with the register history.

For certificated securities, section 51 addresses entry of transfers supported by a proper instrument of transfer delivered to the company or a transfer occurring by operation of law. An administrator should therefore investigate missing authority or contradictory documents before overwriting an entry.

The share transfer record checklist helps organise that supporting material. If a certificate and the register disagree, the guide to a wrong name on a share certificate explains why correction should follow the evidence rather than a cosmetic replacement.

Illustrative example: recording a transfer

A shareholder sells part of an existing holding to another person. The company checks the applicable restrictions, the transaction documents and the authority for the transfer. It then updates the relevant register entries and deals with the certificates in a way that preserves a clear link to the underlying transaction.

The new record should explain both the buyer's holding and the seller's remaining holding. The company retains the earlier record and supporting documents rather than keeping two contradictory files both labelled current. It also reviews whether beneficial ownership information needs updating.

A later adviser can then trace the change from the previous holding to the new position. The example is about maintaining a reliable record; it does not decide the tax treatment or confirm that a particular proposed transfer meets the company's MOI.

What the securities register is not

The securities register is not CIPC's director list, a bank mandate or a certificate showing that the company exists. Those records serve different purposes. A director need not hold shares, and a shareholder need not have authority to operate the bank account.

A capitalisation table used for planning can be helpful but is not automatically a compliant statutory register. It may include proposed, unissued or conditional holdings that should not be described as already issued. Shareholding and certificate assistance should reconcile the actual register, supporting transactions and current certificates before preparing a clean ownership summary.