An important aspect of any company is allocating and managing shares. It is essential to understand types of shares, including those that are beneficially held and non-beneficially held, so you can implement a strategy that works for you. If you’re just starting out, LawPath can help you register your company and manage assets such as shares.
What are Beneficially Held Shares?
Beneficially held shares directly benefit the person who holds them. For example, if you are the only shareholder in your own company, all dividends will be paid directly to you. You benefit directly from your ownership of those shares.
If you are holding shares for the benefit of another person or group, these shares are not beneficially held. Instead, you hold them on behalf of someone else. For example, since a trust cannot own company shares, a trustee may be listed as the legal owner and hold the shares on behalf of the trust.
ASIC and Beneficially Held Shares
Once you have registered your company, when you access ASIC Connect if the shares are beneficially held they will be listed as Yes.
However, if the shares are not beneficially held, they will be listed on ASIC as ‘Beneficially Held – No’. ASIC will not inquire into the trust. This is a useful way to hold shares in a company anonymously.
If you wish to make an application for additional shares you can use the customisable application for shares. ASIC requires companies to record the shares they issue on a register. When new shares are allocated, or ownership changes, you must indicate whether they are beneficially owned.
Managing Company Shares
If you’re setting up a company, share allocation is a key step in determining the rights and liabilities of shareholders in your new business. When you register your company, our range of legal resources will make this step easy. You can also talk to one of our startup lawyers to ensure you meet the legal requirements and create the best possible outcome for your business.
A Shareholders Agreement will also help you govern the relationship between shareholders of your company. For more information, read about why your business needs a shareholders agreement. You can use our shareholders agreement.
Allocating, managing and understanding shares is not always straightforward. Maximise how you use your company’s shares by contacting a commercial lawyer today.
Need more information regarding opening a bank account? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our lawyer marketplace or any other legal needs.
