A share register is used when a business is issuing share capital. It is a managed business record containing information of members and shareholders of the business. It is also known as a ‘register of members’ and is a requirement under the Corporations Act. The company’s members or shareholders information needs to be a part of it and the share register needs to be accessible to the Australian Securities & Investments Commission (ASIC)
What is Included in a Share Register?
A share register must include the following:
- Members’ name, address, date included in share register, and number of shares held for each member.
- Recorded changes to members’ details.
- Date, number, class, certificate number, and payment amount/ status of each issued shares.
- Recorded changes to shares or shareholdings.
Gaining Access of a Shareholder Register
Both shareholders and non-shareholders are able to access the shareholder register at any time. Shareholders can request and gain access to the register and inspect its information as needed. However, for non-shareholders they must provide details as to the reason for their request and what they will be using the information for. Reasons such as gathering information about the wealth of a member or making unsolicited offers to purchase shares or units off market are considered to be an improper use of the register.
Consequences of Not Meeting Share Register Obligations
Under ASIC companies who have not met their legal obligations within the given time period will be charged a late fee and may be at risk of being deregistered if they have any outstanding payments or penalties due. Moreover, on an individual scale, directors who fail to perform their legal duties may be subject to:
- A guilty criminal offence with a maximum penalty of AU$200,000 or imprisonment up to five years, or both
- Be personally liable for any loss or damage the company or others may have suffered
- Be prohibited from managing a company
Key Takeaways
If you are issuing shares you will require the use of a share register in order to do so. A share register is a legal requirement that must be complied with as per the requirement of the Corporations Act. Companies will be legally liable if they do not meet the requirements of the share register.
Maria is a legal intern at Openlegal and is currently in her third year studying Law and Business at UTS. Her interests are commercial law, contract law, and litigation.
Phil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.
