Companies choose to use transfer agents to maintain organized and comprehensive shareholder records. By outsourcing this function to a transfer agent, companies can focus on their core operations while ensuring that all securities-related transactions are accurately processed. Transfer agents have reporting and industry knowledge that is key to executing securities transactions and maintaining an accurate record of shareholders.
If a company is not very active or has very few shareholders, shareholder maintenance can be handled by an employee or the company’s legal counsel, however, this can create a burden on those responsible within the company. As the company continues to grow and has more shareholders, this can be particularly difficult to continue to manage in-house.