Future Business Leaders of America (FBLA) Securities and Investments Practice Test

What role does a registrar play concerning authorized shares?

1. Issues new shares to investors

2. Audits the transfer agent for compliance

3. Handles dividend distribution

4. Reports financial performance

The correct answer is: Audits the transfer agent for compliance

The role of a registrar is crucial when it comes to managing a company's authorized shares. A registrar is primarily responsible for maintaining records of a corporation's shareholders and the shares they own. This includes verifying the issuance and ownership of shares, ensuring that the information is accurate and up to date. By auditing the transfer agent, the registrar ensures that all transactions involving shares are carried out in compliance with relevant regulations and the company's bylaws. This oversight helps to prevent errors or fraudulent activities that could affect the integrity of the share ownership records. Consequently, the registrar's role in auditing contributes to the overall governance and transparency of the company's securities. While other roles may involve aspects related to shares, such as issuing new shares, overseeing dividend distribution, or reporting financial performance, these do not capture the specific oversight and compliance-focused responsibilities that the registrar handles.