Move from spreadsheets

As a busy founder or CEO of a start-up or growth business, keeping a company share register up-to-date and meeting compliance would seldom be the highest priority.

However, when key events such as capital raising or potential investor interest occur, if the company register is not correct, then this can take a long time to rectify and involve large legal and accounting costs.

To avoid this, moving to an online platform to manage shareholder information and compliance has some key advantages. Here’s the top 9 reasons why companies should move their share registers online now:

1. Reduce the errors which can multiply over time

If a share register is kept in a spreadsheet, then mistakes can easily occur in entries, totals, and formulas. These can have a multiplying effect over time, resulting in compounding errors which need to be corrected at a later date and at a large cost. An effective online share register platform will flag any input or calculation errors as the register is being changed, ensuring that it is correct and compliant.

It is very difficult to keep a spreadsheet register with a full and correct share transaction history. A register needs to include details and dates of any repurchase or redemption of shares, and any transfer of shares for each shareholder and across all share classes. For New Zealand companies the register needs to cover any changes to shareholders and their shareholdings within the previous 10 years and for Australian companies, the previous 7 years.

A common issue with using spreadsheets is that these transactions are not captured and calculated correctly- for example where the total shares issued over time is not equal to the number and type which have been allocated to all of the listed shareholders.

2. Create a single source of truth

Usually, multiple spreadsheet versions of share registers will need to be saved over time which can be hard to manage and track across the business. This also leads to security and access issues- ensuring the right people are accessing and updating the correct documents. If key people such as the CFO or Finance Director leave a company, then the knowledge of how to access and manage the share registry spreadsheets can also leave with them.

An online share register avoids this by being a single source of truth- it is the one place where multiple stakeholders can go for the latest information on company shares and shareholders.

3. Be better prepared for business growth and new opportunities

For key events in a company lifecycle such as raising additional capital or preparing to sell, the company’s share register needs to be correct and visible for a number of stakeholders. Using an online platform for the company share register avoids delays and potential embarrassment in trying to unpick and correct historical data in a spreadsheet which can become a rather public affair during these events. The company also avoids the extra costs to correct these spreadsheeting mistakes.

4. Be professional for new investors

If a company is in the process of raising additional capital then granting access for potential investors to view an online share register presents a much more professional picture of the business than a confusing and hard-to-follow spreadsheet does. It is also a way to show investors the professional manner they will be engaged with once they invest in the company.

5. Give investors the full visibility they deserve

For a lot of private investment, very little is given back to the investors due to it being difficult and time-consuming for the business to share any information. Having a centralised online share register which is accessible to shareholders creates an instant investor network. Investors will gain visibility by being able to log-in and access the relevant records and information relating to their investments.

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Share Registry ebook

5. Reduce share register admin

When a company share register is moved online, this can also reduce the amount of admin which a company has to cover. For example, shareholders can log-in and update their own share registry contact information including name and registered address, ensuring that the company register remains compliant. If the company has an Employee Share Ownership Plan (ESOP), then participating staff can also log-in to complete a grant or exercising process with minimal admin.

6. Increase investor and stakeholder engagement

Using an online platform for a company register also presents wider opportunities to increase engagement with stakeholders. Not only can they access the register and their shareholding details, any communications to investors can also be managed through the platform- and because all the names and emails are up to date, this becomes a seamless process. This could include notifications to access quarterly company updates, or the latest share valuation details. Consequently, shareholders feel engaged and up-to-date with the direction of the company, and it makes subsequent conversations about further investment easier.

7. Meet compliance for shareholder communications

Managing communications to shareholders in the same online platform as a company share register also means the company is meeting obligations to keep all shareholder communications, emails, meeting notes, or resolutions for the required time period (in New Zealand and Australia this is for at least 7 years).

8. Integrate to update the regulator’s registry

A major advantage of moving to an online share registry which is integrated with a local regulator’s registry, is that any changes made to the company share registry flow through to the regulator, ensuring ongoing compliance.

For example, Orchestra customers in New Zealand make changes in their share register in Orchestra and these changes update at the NZ companies Office, reducing any double-handling of information. (Likewise for Orchestra customers in Australia with ASIC updates).

9. Share register audit

Part of migrating to an online share registry platform involves the chosen software provider supporting a company to complete an audit of their share registry data. For New Zealand and Australian companies this means comparing it to the Companies Office or ASIC and filling in any blanks well before any investors or other stakeholders are invited to access information online.

Every day that a company leaves its spreadsheet share register incorrect, they are not meeting their compliance requirements and are simply adding to the cost and hassle of fixing it in the future. Making the change to an online platform now means catching omissions or mistakes before they get out of control.


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Related articles:

Creating and maintaining share registers - a guide for Australian and New Zealand businesses

The NZ Companies Office register is not a company’s share registry

3 big mistakes companies make with share registers and stakeholder engagement


DISCLAIMER: This article is for informational purposes only, and contains general information only. Orchestra is not, by means of this information, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This information is not intended as a recommendation, offer or solicitation for the purchase or sale of any options or shares.