What is the difference between shares held beneficially and shares not held beneficially?
ASIC records on their register whether shareholders hold shares “beneficially” or “not beneficially”. Put simply, beneficially held usually means that the owner of the shares is entitled to the direct benefit from the shares. For example, benefits could include the entitlements to payments in relation to any dividends.
Know the Difference
Shares held by a person as trustee, nominee or on account of another person are non-beneficially held. (i.e. the member holds the share for the benefit of someone else). When a trustee or executor is listed as the holder of shares, the shares should be shown as not being beneficially held. This requirement does not apply to a listed company.
A company with share capital must keep a record of all the shares that the company issues. This record is called the register of members (the register). It is sometimes called the ‘share register’.
Generally the register must contain information about the members (or shareholders) of the company and the shares existing in the company.
XYZ Legal Pty Ltd owns shares in its own right, the share register would state –
XYZ Legal Pty Ltd – Beneficially owned – Yes.
If the shares were held by XYZ Legal Pty Ltd as a Trustee for Example Family Trust, then the share register would state –
XYZ Legal Pty Ltd – Beneficially owned – No.
To put simply, if shares are owned individually, they are beneficially held. If they are held in a trust, they are not beneficially held.
The register must contain the following information about each member:
• their name and address
• the date on which their name was entered in the register, and
• the shares held by each member.
Any changes to members’ personal details and/or their holdings must also be recorded in the register.
Check your ASIC Annual Return and ensure your shares are properly recorded. Here at The Quinn Group our experienced team of Tax Accountants and Tax Lawyers can provide you with the total solution and assist you with all your accounting, legal and financial needs. Complete and submit the online enquiry form or call us on 1300 QUINNS (1300 784 667) +61 2 9223 9166 to arrange an appointment today.