Benefits Of Using A Crowdfunding Registered Transfer Agent

by | Dec 19, 2019 | Stocks And Bonds

One of the most popular options for entrepreneurs and fledgling small businesses to raise capital is through a process known as crowdfunding. It is very different from seeking out wealthy investors and making a pitch for their investment dollars. Instead, it relies on a large number of smaller investors, or at least exposure of your business plan to a large potential number of investors, to generate the required capital.

Providing a Wide Range of Essential and Required Services

Working with a crowdfunding registered transfer agent is a benefit to any business using the crowdfunding platform to raise capital. As in traditional business models, the transfer agent takes on the responsibility for managing certificates, paying dividends to shareholders, issuing and canceling certificates through sales and stock transfers, as well as managing specific types of communication between the shareholders and the company over time.

This must all be completed using specific methods as outlined by the United States Securities and Exchange Commission. The transfer agent is responsible for following all mandated policies and record keeping requirements and providing a range of related services for the business. As these services can be complex, working with a registered transfer agent takes all the responsibility away from the startup company and allows the management team to focus on the business.

Specialized Reporting

With the large number of investors through crowdfunding, the Exchange Act requires additional reporting. When a company has either 500 non-accredited investors or more than 2000 accredited investors, they must file SEC reports as a publicly reporting company.

These reports must be filed on a regular basis, and they are detailed and require considerable time to prepare. Allowing our team to manage these reports is an advantage to any growing business.

There are some exemptions to this SEC reporting rule, and our transfer agent can provide specific information relevant to your business. To find out more, call our team at 801-355-5740. Also follow on Instagram.

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