Unveiling the importance of share registers: A key requirement for New Zealand companies
A New Zealand company is required to maintain a share register for several reasons, which are outlined below:
Legal Compliance: The Companies Act 1993 in New Zealand mandates that every company must maintain a share register. Section 87 of the Act specifically states that a company must keep a record of its shareholders, including relevant details such as their names, addresses, shareholdings, and any transfers or changes in ownership.
Shareholder Identification: The share register serves as a primary source of information to identify and verify the shareholders of the company. It provides a comprehensive and up-to-date list of individuals or entities holding shares in the company, allowing for accurate shareholder identification and contact information.
Shareholder Rights and Communication: The share register facilitates effective communication between the company and its shareholders. It enables the company to provide important information, notices, and correspondence to shareholders, such as annual reports, dividend announcements, or notices of general meetings.
Voting and Dividend Distribution: The share register is crucial for managing voting rights and facilitating the distribution of dividends to shareholders. It helps ensure that the voting rights of each shareholder are accurately recorded and accounted for during general meetings or special resolutions. Additionally, it allows the company to verify the entitlements of shareholders to receive dividends and process dividend payments accordingly.
Transfer of Shares: The share register plays a significant role in facilitating the transfer of shares between shareholders. When a shareholder wishes to sell or transfer their shares, the share register provides the necessary information for processing the transfer and updating the ownership details accurately.
Regulatory Compliance and Auditing: The share register is essential for regulatory compliance and auditing purposes. External auditors, regulatory authorities, or government agencies may require access to the share register to verify compliance with company law, financial reporting standards, or to conduct investigations, if necessary.
Transparency and Accountability: The share register promotes transparency and accountability within the company. It helps ensure that the ownership structure and distribution of shares are properly recorded and maintained. This transparency enhances the trust and confidence of shareholders, investors, and other stakeholders in the company.
Maintaining an accurate and up-to-date share register is not only a legal requirement but also an integral part of corporate governance and shareholder management for a New Zealand company.
