Every company in New Zealand and Australia, regardless of size, is required to maintain individual company records, including their share register.
As specified by the NZ Companies Act 1993, information that must be maintained in a share register by New Zealand companies includes the names and addresses of each person or entity that has been an investor in the last 10 years of a company, all transactions pertaining to shares being issued, sold or transferred, and other important company constitutional information.
It is a legal requirement for Australian companies to have a share register as specified in the Corporations Act 2001. The Australian Securities & Investments Commission (ASIC) is the regulatory body who administers the reporting and record-keeping requirements for Australian companies. If a company has not met their share register obligations within the correct timeframes, ASIC can charge large late fees, and they may deregister a company if it has outstanding fees and penalties, or if they believe that the company has ceased trading.
According to the NZ Companies Act, it can cost the directors of a company up to $10,000 each for failing to maintain an accurate share registry. Then there are the additional costs of having lawyers and accountants trawl through multiple years of Excel spreadsheets, disorganised company documents, transactions and legal agreements as they piece together where things went wrong in your company’s ownership structure.
So why are so many companies still choosing to manage their investors in an Excel spreadsheet, rather than spending a fraction of the cost outsourcing their registry tasks? In our experience, companies that choose to manage their share registries themselves are often unaware of the administrative tasks and ongoing maintenance they set themselves up for in the future.
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It’s important to remember that the records you keep now will be the reference point for years to come. Think of it like a car service. You might not like spending money on servicing the car now, but you’d rather do it now than spend 10 times the amount repairing the engine a few years later. The same principle applies to your company’s share register. If the documents, transactions and agreements that you maintain now are incomplete, incorrect or poorly managed, problems will compound when you have to reconcile the information in a few years.
Publicly listed companies with hundreds or thousands of shareholders will often use a share registry service provider to build and maintain their share register and manage their investors. However, for many private businesses these services are not a good fit or they are cost-prohibitive, and so these companies have traditionally managed their share register on a spreadsheet. However this can cause a number of issues including manual spreadsheet errors multiplying over time, while access and updates often rely on a single person. This puts the business in a vulnerable situation if this person changes role or leaves the company.
Orchestra simplifies the management and legal obligations your company has with share registers and investors. Orchestra provides an online share register tool which companies can use to track shareholdings over time. This register includes an investor dashboard that allows individual investors to review their shareholdings. Companies can log in to manage their share register, while lawyers and accountants can be given access to view and update details. Additionally, key share register changes in Orchestra integrate through to the NZ Companies Office register or ASIC so details are correct and compliant.
Orchestra has been designed to be easy-to-use for companies, investors and advisers. The entire system is managed online and stored securely with audit trails for every transaction and transfer, making your information easy and fast to access whenever you need to.
Sign up for a free guided demo of Orchestra here.
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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.