Stock Ledger: Everything You Need to KnowStartup Law ResourcesVenture Capital, Financing
A stock ledger is a record that keeps track of the all stock transactions for your corporation. All stock transactions must be in the stock ledger. 3 min read
2. What is Written in a Stock Ledger?
3. The Purpose of the Stock Ledger
4. Updating the Stock Ledger
5. The Stock Ledger is a Permanent Record
6. You May Need Two Stock Ledgers
7. Other Names for the Stock Ledger
8. Talk to a Lawyer
Updated July 14, 2020:
What is a Stock Ledger?
The stock ledger is a record that keeps track of the stock transactions for your corporation. This is only one part of the total amount of corporate records you must keep, and should be maintained in the corporate records book. All transactions regarding the shares of your business must be recorded in the stock ledger, including when shares were initially issued and any stock transfers that occur. The stock ledger should also include any shares which are surrendered or lost.
What is Written in a Stock Ledger?
For every stock transaction, the information necessary to complete the stock ledger correctly will include:
Name of the shareholder;
Complete mailing address of the stock shareholder including contact number;
Stock certificate number;
The total number of shares outstanding;
The date the shares were purchased;
How much the person paid per share (consideration/monetary value);
The class of shares;
Why the shares were transferred.
The Purpose of the Stock Ledger
The stock ledger makes it possible to identify all of the shareholders of the corporation at any given time. It is a summary of events as you record stock transactions after they occur. It is a working document of all the current and previous shareholders of the corporation and contains the personal details of the stockholders and the shares they own.
Updating the Stock Ledger
The stock ledger must be kept up to date and should be updated every time a transaction involving shares happens. Transfers or new purchases of stock should be recorded as part of the transaction process. The stock ledger is made available to potential investors, and must be an accurate representation of all current shareholders.
The Stock Ledger is a Permanent Record
The stock ledger is a permanent document created to keep track of all of the stocks ever issued by your company. Anyone should be able to look at the ledger and see who has owned every stock ever sold or transferred by your corporation. This is particularly useful when stock certificates are lost and when individual is trying to settle the estate of an individual who owned some of your stock.
You May Need Two Stock Ledgers
In some states, you will need to have two stock ledgers. In the first stock ledger, you would record the initial stock offering and all of the proper information of the transaction. In the second stock ledger, you would record the number of shares that each stockholder owns along with the correct identifying information.
In some states you must identify a registered agent who is responsible for maintaining the stock ledgers of your corporation. Generally, the stock ledger, as well as other important items like a corporate seal or other company documents are often held by the corporate secretary to ensure safekeeping.
Improperly keeping/maintaining a stock ledger can lead to you being responsible for the liabilities of your company (i.e. your corporate veil being pierced).
Other Names for the Stock Ledger
The stock ledger may also be referred to as the stock book, the stock transfer ledger, or a corporate stock ledger. With the technology available for today's businesses, it is now possible to maintain a stock ledger online.