Your company, whether private or public, could benefit from using a transfer agent. Visit our in-house vs. out-sourced page to learn more about why you should consider using a transfer agent.

Why Private Companies
For executives of private companies that are looking to go public in the future, spread ownership to multiple individuals, or are looking for greater funding sources, it might be a wise choice to engage a stock transfer agent.  Even though you are not yet required to comply with the SEC (Securities and Exchange Commission), you are required to comply with state escheatment, IRS cost basis reporting, and general UCC statutes regarding the transfer of stock.

Why Public Companies
If you are public, you aren’t required to engage a transfer agent or outsource your shareholder record-keeping, but it can pay off.  You would save yourself from having to perform stock transfers and maintain regulatory compliance.  In addition, you would be able to limit yourself with liability through your “independent agent.”  You may not have complete control by engaging a transfer agent, but today, most agents have online access where they can view reports, edit/update shareholder addresses and even request stock issuances or transfers.  Transfer agents can also assist you by acting as your independent proxy agent or solicitor.

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