Do I Need A Registered Agent To Sell Stock In My Company

Equally an private investor, yous accept upwards to iii choices when it comes to property your securities:

This publication explains these choices in greater detail, by laying out the advantages and disadvantages of each and past answering frequently asked questions. Depending on the blazon of security and where you purchase it, yous may or may not have all these choices well-nigh how your securities are held. For example, not all companies offer direct registration, and some no longer consequence concrete certificates. You should inquire your broker or the company what options you lot accept.

Physical Certificate

When y'all purchase a security, whether through your broker or from the company itself, you can ask to have the actual stock or bail certificates sent to you. You may have to pay a nominal fee for the added expense of issuing a paper document. It'southward important that you safeguard your certificates until yous sell or transfer your securities. It can be difficult to prove that yous once owned a document that has been lost, stolen, or destroyed. Your broker — or the visitor or its transfer amanuensis — volition more often than not charge a fee to replace a lost or stolen stock certificate. For more information on safeguarding your securities, please read our "Fast Answer" on Lost or Stolen Stock Certificates.

The advantages of holding a physical certificate include:

The visitor knows how to reach yous and volition transport all visitor reports and other information to you directly.
You may find it easier to pledge your securities every bit collateral for a loan if you hold the certificates yourself in concrete certificate grade.

The disadvantages include:

When you desire to sell your stock, you will take to ship the certificate to your broker or the company'south transfer agent to execute the auction. This may brand it harder for you to sell quickly.
If you lose your document, y'all may be charged a fee for a replacement document.
If you motility, y'all will have to contact the visitor with your change of address and so that you practise non miss any important mailings.

Street Name Registration

You may have your security registered in street name and held in your account at your broker-dealer. Many brokerage firms will automatically put your securities into street name unless you give them specific instructions to the contrary. Under street name registration, your firm will go along records showing y'all as the real or "beneficial" possessor, merely you lot volition non be listed directly on the issuer'due south books. Instead, your brokerage firm (or another nominee) will appear as the possessor on the issuer's books.

While you will non receive a certificate, your business firm will send to you, at to the lowest degree four times a yr, an account statement that lists all your securities at the broker-dealer. Your broker-dealer will too credit your account with your dividend and interest payments and will provide you lot with consolidated taxation information. Your banker-dealer will send y'all issuer mailings such every bit annual reports and proxies.

The advantages of letting your brokerage firm hold your securities in "street name" include:

Because your securities are already with your banker, you can place limit orders that directly your broker to sell a security at a specific price.
Your brokerage firm is responsible for safeguarding your securities certificates and so you don't have to worry about your securities certificates being lost or stolen.
Your brokerage house may keep you lot informed of of import developments, such as tender offers or when bonds are called.
Information technology is easier to prepare a margin business relationship.

The disadvantages include:

You lot may experience a slight delay in receiving your dividend and involvement payments from your brokerage firm. For case, some firms only laissez passer along these payments to investors on a weekly, bi-weekly, or monthly ground.
Since your name is non on the books of the company, the company volition not mail of import corporate communications straight to you.

Direct Registration

If a company offers direct registration for its securities, you tin can choose to exist registered directly on the books of the company regardless of whether you bought your securities through your broker or direct from the company or its transfer agent through a direct investment programme. Directly registration allows you to take your security registered in your name on the books of the issuer without the need for a physical certificate to serve equally evidence of your buying. While you lot volition not receive a document, yous will receive a statement of buying and periodic account statements, dividends, almanac reports, proxies, and other mailings directly from the issuer.

The advantages of direct registration include:

Since you are "registered" on the books of the company as the shareholder, you will receive annual and other reports, dividends, proxies, and other communications directly from the company.
If you want to sell your securities through your broker, you lot can instruct your broker to electronically move your securities via DRS from the books of the company and then to sell your securities. Your banker should be able to practise this rapidly without the need for y'all filling out complicated and fourth dimension-consuming forms.
Yous do non accept to worry about safekeeping or losing certificates, or having them stolen.

The disadvantages include:

If you choose to buy or sell registered securities through a company's straight investment plan, you usually will not be able to purchase or sell at a specific market price or at a specific time. Instead, the visitor will purchase or sell shares for the plan at established times — for instance, on a daily, weekly, or monthly basis — and at an boilerplate market price.

While it is solely your decision how to hold your securities, you should advisedly review each of the alternative forms of security registration and should consult with your financial advisor or broker-dealer to determine which form is best for you.

Oftentimes Asked Questions

Q: What is the Straight Registration System?

A: The Direct Registration System, or DRS, is a system that enables an investor to electronically move his or her security position held in straight registration volume-entry form back and along between the issuer and the investor'southward broker-dealer.

Q: After I make my decision on how I desire to hold my security, what practice I do?

A: You should cheque with the issuer or your broker-dealer to find out if the issuer offers straight registration. If you are purchasing a security, tell your broker-dealer yous want to hold your securities in direct registration. If you currently hold a certificate, you tin mail or accept your certificate either to the issuer or to your banker-dealer with instructions to change to directly registration. If you currently hold your security in street name registration, yous can instruct your banker-dealer or the issuer to motion your security position to the issuer for straight registration. In any situation, you will receive a argument of buying from the issuer acknowledging your DRS volume-entry position once the change has been made.

If you desire a certificate or if you want to use street proper noun registration, tell your broker-dealer your choice at the time of buy. If you elect a certificate, one will be sent to you. If you lot cull street proper name registration, your broker-dealer will send you a confirmation and periodic account statements acknowledging your ownership. If yous currently hold a certificate, you can deliver the document to your banker-dealer with instructions to change your registration to street name registration. If you currently hold in street name registration, y'all tin tell your broker-dealer to obtain a document for you.

Q: What do I have to do to sell my security?

A: To sell a security held in direct registration, y'all can:

instruct the issuer to sell your security (many issuers accept programs in place to accommodate auction requests); or
instruct your broker-dealer or the issuer to electronically move your security to your broker-dealer for your broker-dealer to sell; or
request a physical certificate and evangelize information technology to your broker-dealer to sell.

To sell a security held in street proper name registration, you tin:

instruct your broker-dealer to sell your security; or
request a physical certificate and deliver it to some other banker-dealer to sell; or
instruct your broker-dealer or the issuer to electronically move your security to the issuer for the issuer to sell (many issuers have programs in place to suit sale requests) or to electronically move to another banker-dealer to sell.

To sell a security for which you concur a physical document, you tin:

deliver the document to your broker-dealer with your instructions to sell or
evangelize the certificate to the issuer with your instructions (a) to modify the registration to DRS and move the position to your broker-dealer to sell if your security is eligible for direct registration or (b) for the issuer to sell if the issuer has a program in place to accommodate sale requests.

When selling a security through the issuer, the issuer will sell your security nether the terms and weather condition in identify for that issue. For example, some sell orders will be executed on the day the issuer receives them, and some orders are aggregated for frequent, simply non daily, execution. (Notation: you should ask the issuer if it offers a selling service and what the terms and conditions are.) Proceeds from the sale volition be mailed to you lot three concern days later the engagement of sale.

When selling through your broker-dealer, your instructions will be acted on immediately and in accordance with the guidelines information technology provides to yous. Proceeds from the auction volition be made bachelor to y'all or credited to your account three business days after the date of auction.

Q: Can I place a limit order? Market social club? Finish lodge?

A: Only a banker-dealer tin execute a limit, marketplace, or stop order. As a result, you can identify any of these types of orders only if you utilize a banker-dealer to execute a transaction for securities held in direct registration, street-proper name, or in certificate form.

Q: What nigh my human relationship with my broker-dealer if I use straight registration?

A: Yous tin can maintain your human relationship with your broker-dealer regardless of your choice of registration.

When you buy a security to agree in straight registration, y'all tin can tell either your banker-dealer or the issuer to include pertinent banker-dealer information in the issuer's records.
If you practise not have your broker-dealer data included in the issuer's records at the fourth dimension of purchase and afterward want to or if you want to modify the broker-dealer information in the issuer's records, you lot may exercise so. You lot should contact either your broker-dealer or the issuer to obtain information on the procedures and the documents required for such deportment.

Q: If I hold certificates and there is a stock distribution, will I become a document for my boosted shares?

A: If the consequence is eligible for direct registration, you volition probably receive a argument of ownership instead of an additional certificate.

Q: What are the fees associated with direct registration? With street proper noun registration? With a certificate?

A: At that place are no fees charged by an issuer for directly registration. Nevertheless, because broker-dealers offering differing services and plans, you should contact your broker-dealer to acquire what, if any, fees it charges.

Q: If I opt for direct registration, what happens if I lose my statement of buying?

A: If you ever need a duplicate statement of ownership, you should contact the issuer. The issuer volition mail service you lot a new statement of ownership.

Q: What happens if my concrete certificate is lost or stolen?

A: Brokerage firms, banks, transfer agents, and corporations accept procedures in place to help investors supercede lost or stolen certificates. If your securities certificate is lost, accidentally destroyed, or stolen, yous should immediately contact the transfer agent and request that a "stop transfer" be placed against the missing securities. Your broker may be able to assist you with this process.

The "stop transfer" helps to forbid someone from transferring ownership from your name to another's. The transfer agent or banker-dealer will report the certificates missing to the SEC's lost and stolen securities programme. For more information please read our "Fast Respond" on Lost or Stolen Stock Certificates.

Q: How are my securities protected if I choose street proper noun ownership?

A: Nearly all banker-dealers are members of Securities Investor Protection Corporation ("SIPC"). Equally a result your securities and money held at your broker-dealer are protected upwardly to $500,000 with a $100,000 limit for cash. Many broker-dealers also acquit insurance in backlog of SIPC's coverage. However, SIPC does not protect you against losses caused by a decline in the market value of your securities. For more data about SIPC coverage, please read our "Fast Reply" on the Securities Investors Protection Corporation.

We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.