9 reasons why you should move to an online share register9 reasons why you should move to an online share register

As a busy founder or CEO of a growth business, meeting compliance requirements and keeping a company share register or cap table up-to-date may not often be the highest priority.

However, if the company register isn’t correct when key events occur—such as when raising capital or receiving interest from potential investors—then it can take a long time to fix and may involve legal and accounting costs. 

To avoid this, moving to an online platform to manage shareholder information and compliance has some key advantages. 

Here are the top 9 reasons why companies should move their share registers online now:

1. Reduce errors

2. Create a single source of truth

3. Be prepared for business growth

4. Be professional for new investors

5. Give investors visibility

6. Reduce share register admin

7. Increase investor and stakeholder engagement

8. Integrate to update the regulator’s registry

9. Share register audit

1. Reduce errors which could 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 later 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’s 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. For Australian companies, the register of members needs to have details for 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 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 several 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 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’s also a way to show investors the professional manner they’ll 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.

6. 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 scheme (ESS), then participating staff can also log in to complete a grant or exercising process with minimal admin.

‍7. 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. This will lead to shareholders feeling engaged with and up to date with the direction of the company. It also makes later conversations about further investment easier.

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 that’s integrated with a local regulator’s registry (like the NZ Companies Office or ASIC), is that any changes made to the company share registry flow through to the regulator, ensuring ongoing compliance.

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

9. Share register audit 

Part of migrating to an online share registry platform involves the software provider supporting a company to complete an audit of their share registry data. 

For NZ and Australian companies this means comparing it to the companies register at the Companies Office or the register of members at 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 aren’t 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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