Transfer Agents maintain a company’s records of ownership (i.e. who owns the securities the company has issued). Transfer Agents were created by federal law to ensure a licensed third party would facilitate the issuance, exchange, cancellation and payments related to, securities issued by a company. In short, the purpose of a Transfer Agent is to track each investor’s investment to facilitate the delivery of information, the exercise of voting rights (if they exist), the deliver of dividends (if holders are entitled to them) and the conversion or exchange of the security in the event of a liquidity event such as a change of control, merger or initial public offering.
Transfer Agents participate in permissible transfers of outstanding securities, and when applicable, proxy voting, dividend/interest payments, further share issuance, transfers, lost shareholder searches, and much more.
Soon after the deal you have invested in closes, the issuing company should communicate with you regarding where the official records of your Security will be held. Examples of Transfer Agents are, but not limited to, Carta, KoreConx, Vstock, ComputerShare and Securitize.
Record keeping of your private investments is not centralized, and you may have to track your position in private companies across many Transfer Agents and where applicable, a Custodial Account. We’d recommend that you take careful notes on all accounts where the records of your private securities are held, so at any moment of time you can check.