A shareholder ledger is a document used by corporations that describes how many shares of the company are owned by a particular shareholder. It also outlines details related to the sale or transfer of shares from corporation to shareholder; from shareholder back to corporation, or from one shareholder to another shareholder in a more specific transaction.

In addition to keeping an official record of all current and past shareholders, corporate finance officers use shareholder ledgers to finalize corporate income statements for the fiscal year. For this and many other reasons, it’s imperative that shareholder ledgers be kept in secure environments. The last thing any corporation needs is a compromised shareholder ledger that publicly exposes shareholder information, as well as the value of assets in circulation.

What information is recorded within a shareholder ledger?

The contents of a shareholder ledger should include all fundamental details about that shareholder’s relationship with the corporation. Examples of items found within shareholder ledgers include:

• Shareholder’s name, home address, and any personal contact information on hand
• Share certificate numbers displaying the date, time, and value of share transactions
• Total amount of outstanding or public shares, less the preferred or restricted shares maintained by the company
• Issuance and/or cancellation dates outlining periods of time when the shareholder owns designated shares of the corporation
• The total value of shares currently owned by the shareholder
• Current and projected capital share structures for the company

As you can see, most of this information describes personal details about specific shareholders, along with the value of the corporate shares in their possession. It’s important to have secure shareholder ledgers so that these personal details are properly protected.

Who can legally access shareholder ledgers?

At the end of the day, shareholder ledgers require extra layers of security to ensure no confidential information is shared with those who shouldn’t have it. That being said, under jurisdictional law, who has the legal right to access shareholder ledgers?

Existing shareholders of a corporation are entitled to access shareholder ledgers at no cost. Regardless of share class, shareholders have the right to view information about their fellow shareholders as well as any proxy considerations or tender offers that are pending before a shareholder meeting. However, access to other items like accounting statements or corporate contracts with third-party vendors remain restricted.

Non-shareholders can request access to a corporation’s shareholder ledger. To do so, they must submit a written request to the corporation’s chief executives that details the purpose for the request, and how the information intends to be used. If the company suspects, in any way, that the private information in shareholder ledgers will be used by non-shareholders for illicit reasons, they can legally decline the request for access.

Use entity management software to secure shareholder ledgers

So how do you create the perfect secure shareholder ledger? Storing shareholder ledgers as paper documents within an office filing cabinet is not the most secure way to protect confidential shareholder information. In fact, the office property, where those filing cabinets are maintained, is owned by the corporation rather than the shareholders. Shareholders cannot designate where or how to secure corporate ledgers within the office space itself.

Given that there is the potential for paper documents to be lost, misplaced or leaked publicly, why take that security risk when there are alternative methods? Instead, digitize all corporate records within a shareholder ledger and use entity management software to keep all pertinent files under strict digital lock and key.

Entity management technology includes built-in biometric and hardware key authentication security. This ensures all private data is securely stored within the cloud and is accessible to authorized users of the account (i.e. the shareholders) from any location.

In addition to the added security, entity management software offers authorized users greater convenience and efficiency. Instead of spending several hours combing through paper documents within the shareholder ledger, all information can be easily sourced, pulled, and reviewed in a matter of seconds. This is a powerful added benefit to assist shareholders whenever they request access to shareholder ledgers; it’s quick, convenient, and maintains the highest standards of digital security.

Are you ready to create more secure shareholder ledgers? Join the MinuteBox revolution and provide greater service and security to your corporation’s shareholders. Help your investors feel more confident that they’re part of an innovative company that respects shareholder privacy while working towards earning higher dividends for all.