What is a Holder of Record?
A Holder of Record is the quintessential owner of a security—think of them as the king (or queen) of investment land! This glamorous title belongs to the individual or entity that is officially recorded as the owner of a security. They are not just there for decoration, though; the holder of record possesses rights, benefits, and responsibilities that come with ownership, including:
- Voting Rights: In the case of stocks, holders of record get a say in corporate governance. Yes, they can vote to elect board members or on significant corporate matters, assuming they don’t end up in a “who’s the loudest” contest!
- Dividend Payouts: Get in line for those delicious dividends! If the company’s feeling generous, the holder of record receives their fair share.
- Interest and Principal Payments: As for bonds, holders are entitled to regular interest payments, and at maturity, they reclaim their principal from the issuing authority—who doesn’t love getting paid back?
Holders of record are typically found on a register of shareholders or a similar ledger, so they can check their royal status regularly.
| Holder of Record | Beneficial Owner |
|---|---|
| Registered name on the security certificate | Actual owner who may not be listed on the certificate |
| Has rights such as voting and dividends | May delegate rights through mechanisms like proxies |
| Generally a longer-term participant | Sometimes short-term investors |
Example of a Holder of Record
Imagine Sarah invests in 100 shares of Widget Corp. a month before their annual meeting. At 5 PM on the day of the meeting, she glances at her watch and remembers she’s the holder of record listed—she owns the rights to vote on crucial decisions about the company’s future. Heart racing, she heads out to participate! 📈📊
Related Terms:
- Beneficial Owner: Someone who enjoys the benefits of ownership, even if their name isn’t on the certificate.
- Proxy: A person authorized to act on behalf of a shareholder, helping them cast votes or make decisions.
- Shareholder: An individual or institution that owns shares in a company.
Humorous Insight
“Owning shares is a lot like owning a house—it comes with rights, responsibilities, and occasional visits from the tax man!” 😄
Fun Fact
Did you know that the term “holder of record” became particularly significant during the 1980s when companies began to recognize how influential stockholders’ votes could be? Talk about shareholder power! 🔋
Frequently Asked Questions
What does a holder of record do?
The holder of record oversees rights such as voting and receiving dividends and ensures they remain up-to-date with corporate communication.
Can someone be a holder of record without owning any shares?
Not at all! If you aren’t an owner, the title can’t adorn your name. Skin in the game is a required policy for claiming that title!
How does someone become a holder of record?
To become a holder of record, one just needs to buy securities from a brokerage or issuer, and it will be registered in their name. Simple and straightforward!\
What happens during corporate actions for holders of record?
During events like stock splits or mergers, holders of record will be the ones making the decisions or receiving benefits based on their ownership. Food for thought: anyone needs a proxy for the vote? 😂
Are holders of record liable for the company?
Generally, holders of record are not personally liable for corporate debts, just like a fan isn’t liable for a sports team losing its game—thank goodness for limited liability!
Test Your Knowledge: Holder of Record Quiz
Feel empowered by the knowledge of being the holder of record; may your investments be rewarding and your shareholders’ meetings be entertaining! 🎉📈
