What makes transaction management in Athennian powerful is the automation between classes of capital, transactions, shareholdings and certificates. In order to take advantage of this automation, you first need to understand the fundamentals and relationships between these four systems.
Before we get into more details, the summary of how these systems work together is as follows. Capital classes define the authorized capital of the company, you can issue shares or units from authorized classes of capital in transactions, those issuances create certificates that hold the securities and the parties (entities or people) that you issue those securities to become the shareholdings. Once you complete your first issuance of securities, you can then conduct other types of transactions such as transfers and redemptions.
When you create a new transaction in the Securities > Shares > Transactions tab, 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 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. 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 a 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.
For example, if you Tom has 500 shares on certificate A-1 and wants to transfer 250 to Sam and 250 to Steve. You would create two transfer transactions, one to Sam and one to Steve. The first transfer would cancel A-1 with a balance remaining of 250 shares. You would then select A-1 to transfer the balance of 250 shares to Steve.
Athennian will issue a warning if you have shares recorded to cancelled certificates to help you ensure that all your shares are recorded to Issued certificates.
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. If you have a shareholding in Class A Shares, you will need to create a new shareholding in the Class B Shares, even if it involves in the same parties. 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.