What’s a Transfer Agent and Why You Need One?

by | Sep 24, 2018 | Financial Services

Many shareholders interact with a transfer agent regularly without really knowing what they do. While it doesn’t hurt you not to know, you may not be utilizing all the services they provide, which means you could be missing opportunities. A transfer agent is usually part of a financial services company and manages or keeps track of your registered shareholders and stocks. They provide reporting, communications, and recordkeeping. They can also help you go from privately owned to publicly owned, as well.


These agents must be well-versed in state regulations and SEC rulings, which can quickly become complex and confusing. Many times, agents work with both private and public companies, ensuring that they stay on top of the regulations, implement appropriate actions, and plan for any new regulations that may happen.

Maintain Records

One of their primary responsibilities includes maintaining and managing records for the client (you). That includes the official listing of the shares you have, as well as the shareholders. It includes contact information and names, as well as any dividends paid and other pertinent information. The agent you choose is required to keep all the information current.

They also ensure that your distributions and dividends go to the right person at the right time. They must ensure that any new information is noted and make appropriate changes.


These agents are also required to make the dividend payments to the shareholders and report that income to the IRS during tax season. Corporations may also use their services to handle a variety of corporation actions, including acquisitions, spin-offs, mergers, and more. Many times, these agents are the Inspectors of Election during the annual meetings. These are one-time events, and you should discuss this need with your agent prior to the event, as not all transfer agents offer these services. Visit Colonial Stock Transfer Company, Inc for more information.

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