The registrar keeps the registry list, and after the stocks have been transferred either by the company itself or by its duly ap pointed transfer agent, the registrar receives in each case the old canceled certificate and the newly issued certificate, proves them, takes a record of the surrender and cancellation of the old and of the issue of the new in substitution, and by his signature identi fies the new as legitimate. The registration implies that the registrar guarantees that the new certificate has been issued in regular form by the transfer agent and that the outstanding registered stock does not exceed the authorized amount.
The courts sometimes hold the registrar liable for certain other implied and incidental responsibilities, but there is no law specially fixing the liabilities of registrars and few decisions of courts throw light on the matter. To make sure of the obliga tions involved, a bank or trust company on becoming registrar for a corporation may enter into a contract specifying them in detail. It is a much disputed point whether the registrar acts only in the capacity of agent for the corporation when registering, from time to time, the respective certificates, or whether the registrar is under financial responsibility either for the stock issued illegitimately by him or for any uncanceled certificates in lieu of which he has issued new ones. Since the purpose of regis tration is to protect third parties, the registrar should apparently be held financially responsible; but he does not have the facilities for determining the propriety of transfers as made by the transfer agent, because signatures, powers of attorney, probate certifi cates, and other necessary papers are filed with the transfer agent and not with him.
Procedure and Functions of Registrar When a bank or trust company becomes registrar for a cor poration, certain information is required relative to the total amount of stock authorized to be issued, if none has been issued as yet, and the authorized amounts issued and outstanding, if any issue has been made. After the total authorized stock has been registered, new certificates are not issued except on sur render and cancellation of an equal amount of the old outstanding certificates. Registrations are usually presented before 1 1 A.M., so that they may be entered in the register, signed, and returned to the transfer agent in time for delivery by I :3o P.m. The new certificates are entered on the credit side of the register, and the canceled certificates on the debit side, the date of cancellation being stamped in the column provided for that purpose. Monthly
or quarterly the registers are proved by totaling all the outstand ing certificates on the registers and checking the total with the amount of outstanding stock.
Each certificate received by the registrar must be examined for the authenticity of the signatures of the duly authorized officers of the corporation and that of the transfer agent, for the filling, and to see that the certificate is cut for the correct number of shares. A separate stock register is kept for each stock regis tered, and if the company has two or more kinds of stocks, such as common and preferred, a separate register is kept for each kind. The register contains columns for the certificate numbers and the amount of the shares of stock of which the certificates have been canceled, for the new certificates registered, the date of registry, the name in which the new stock is issued, and the date of cancellation of the old certificate.
The Transfer and Registration of Bonds Coupon bonds are usually made payable to bearer and owner ship passes by delivery. When it is desired that bonds shall not pass by mere delivery, they are registered, that is, issued in some particular name and thereafter are transferable only on the books of the company. Most coupon bonds may be registered as to principal, but the coupons still remain payable to bearer; the principal then is payable only to the registered holder whose name appears on the books of the company. On all bonds that can be registered as to principal, space is provided for the name of the registered holder, the date of registration, and the signature of the registrar.
Bonds without coupons attached arc always fully registered and are transferable only by assignment. Interest thereon is payable to the registered holder. Coupon bonds and registered bonds are in most cases interchangeable, and the holder of a coupon bond may exchange it at any time for a fully registered bond, or vice versa, on payment of a small charge—perhaps $i for each new bond issued—to cover the cost of engraving. The advantage of owning the unregistered bond is in the readiness with which it may be sold or transferred, whereas the advantage of the registered bond lies in the difficulty of its negotiation should it be lost or stolen.