What makes transaction management in Athennian powerful is the automation between shares/unit classes, transactions, shareholdings and certificates. However, to take advantage of this automation, you first need to understand the fundamentals and relationships between these four systems.
Before we get into more detail, here is a summary of how these systems work together. The categories of shares/units define the authorized capital of an entity. An entity can issue shares/units from authorized categories of shares/units using transaction workflows. Completing these transactions to issue shares/units results in the issuance of share/unit certificates. These certificates serve as an attestation of ownership of the entities/individuals as shareholders/unitholders of the entity which issued shares. Once issuance transactions are completed, entities can then do other types of transactions like transfers or redemptions.
When you create a new transaction in the Securities > Shares > Transactions tab (as shown below), the transaction will automatically default to a Pending status, a new certificate will be created with an Issued status and a shareholding record will be created. You can click on the transaction record to confirm it once all of your documents are signed and filed.
Certificates can be found in the Securities > Shares > Certificates tab. Certificates record transactions and are evidence of ownership of a certain amount of shares. Certificates have an Issued and a Cancelled status. Transactions are automatically associated to certificates, but transactions can also be manually associated with certificates if you are manually entering in data or re-building corporate history in Athennian.
Because you can store issued shares on cancelled certificates, there are fields for both Net Shares and Total Shares. The Total Shares represents the total number of shares that were recorded on the certificate originally. The Net Shares represents the amount of shares that are still currently recorded on the certificate.
As a matter of legal accuracy, shares should not be recorded on cancelled certificates. However, to assist with share certificate management, you can store shares on cancelled certificates as a security balance to enable you to transact with those shares in another transaction without having to create temporary certificates to hold a balance remaining. Athennian will, however, issue a warning message if a cancelled share certificate still holds shares - which is where you will have the option to either transfer the remaining shares to another party, redeem them, or reissue the certificate to keep the shares recorded on it.
As an example: Tom has 500 common shares on certificate C-1 and wants to transfer 250 common shares to Sam and 250 common shares to Steve. To this happen, you would first create one transfer transaction to transfer the first 250 common shares to Sam, and then create the second transfer transaction to transfer the last 250 common shares to Steve. The first transfer transaction would cancel certificate C-1 and leave a balance of 250 common shares on the certificate. The balance of the common shares would then be transferred over to Steve.
Shareholdings are aggregate shares and certificates that are held by one or more parties joined in an equity interest. Shareholdings exist at the class level. Therefore, even if a shareholder holds Class A Shares, a new shareholding will need to be created to issue Class B Shares to that same shareholder. Segregating interests like this is an information architecture decision to enable faster loading of data and calculations of ownership and voting percentages across classes.
Shareholdings allow you to include multiple parties to an equity interest. You can describe each party's interest using the dropdown list as a trustee, beneficial owner, joint holder, administrator, receiver and a variety of other interest types.
Similar to certificates, shareholdings are automatically connected to transactions, but you can also manually associate a transaction with a shareholding. Shareholdings will also show you which certificates are held by that shareholding.
If you accidentally created two identical shareholdings, you can consolidate shareholdings by selecting two or more and clicking Consolidate.