‍Understanding Shareholder Structure, Cap Tables, and the Role of Notarization in Corporate Governance‍

In the corporate world, clarity and verification of ownership are not just best practices, they are essential pillars of legal compliance, risk mitigation, and investor confidence. Whether you’re launching a startup, undergoing due diligence, or preparing for cross-border expansion, understanding the distinctions between a shareholder structure and a capitalization table (cap table), and knowing when notarization is required, is critical.

This article explores:

• What a shareholder structure is
• What a cap table is and how it differs
• When and why each document may require notarization
• How technology platforms like Legitify streamline the notarization process for global businesses
  
  

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What Is a Shareholder Structure?

A shareholder structure is a legally significant representation of a company’s existing ownership. It outlines who owns the company and how that ownership is allocated. It identifies each shareholder, the type and number of shares they hold, and their percentage of ownership. In many cases, it also includes voting rights, which may differ from ownership percentages if there are multiple share classes.

The structure can be presented as a simple table for smaller companies or a visual chart when there are complex layers of ownership, such as holding companies or international entities.

Key Elements of Shareholder Structure

• Identities of Shareholders: Legal names of all persons or entities holding shares
• Share Classes and Quantities: Common shares, preferred shares, or other special classes with associated rights
• Ownership Percentages: Based on issued and outstanding shares
• Voting Rights: May differ from ownership depending on the class of shares or contractual agreements

This structure is typically required for regulatory compliance, filings with commercial registries, bank account openings, licensing procedures, and corporate governance disclosures.

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What Is a Cap Table?

A capitalization table (cap table) is a more dynamic and forward-looking record that provides a comprehensive view of all equity and equity-linked instruments in a company. 

A Typical Cap Table Includes:

• Shareholders (founders, investors, employees)
• Convertible Notes, SAFEs, Warrants: Instruments that represent potential future ownership
• Stock Option Pools: Reserved for future grants to employees or advisors
• Dilution Scenarios: How future events may impact ownership

While a shareholder structure shows actual, legal ownership, a cap table reflects both current and potential ownership. This distinction is vital in financing, valuation, exit planning, and legal due diligence.

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Cap Table vs. Shareholder Structure: What’s the Difference?

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When Is Notarization Required?

Notarization adds legal credibility and evidentiary strength. While not always mandatory, it is frequently requested or legally mandated in high-stakes or regulated scenarios. In these cases, notarization provides a formal, legally recognized confirmation of how ownership is distributed, reinforcing the credibility and reliability of the structure presented.

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When Is a Notarized Shareholder Structure Required?

A notarized shareholder structure serves as a formal, legally recognized declaration of ownership. It’s especially relevant when:

• Opening corporate bank accounts, particularly in international setups
• Fulfilling KYC/KYB/AML regulations
• Engaging in M&A transactions
• Applying for licenses or participating in government tenders
• Settling ownership disputes
• In many EU jurisdictions, notarization is required when updating shareholder registries in official filings or when executing share transfer agreements.

In these cases, notarization ensures ownership is verified, trusted, and legally sound.

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When Is a Notarized Cap Table Required?

Though not always mandated, notarizing a cap table may become necessary in situations where future ownership rights need to be formally recognized. This often applies when:

• The cap table serves as evidence in legal or tax disputes
• Investor positions must be verified during due diligence or acquisition
• Submitting equity information to regulatory or financial institutions
• Unconverted instruments (e.g., SAFEs or convertible notes) impact ownership or require enforceable legal recognition

In these cases, a notarized cap table complements the shareholder structure by validating both existing and anticipated ownership rights.

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When Should Both the Shareholder Structure and Cap Table Be Notarized?

There are scenarios where notarizing both the shareholder structure and the cap table is requested by legal advisors, investors, and institutions. This is especially common when a company is:

• Raising capital
• Entering cross-border markets
• Being audited or acquired
• Subject to regulatory review

Notarizing both the shareholder structure and cap table provides:

• A complete, reconciled picture of ownership
• Legal clarity on convertible instruments and vesting schedules
• Assurance for counterparties in contracts or capital events

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How Legitify Simplifies the Notarization Process

Legitify is transforming how companies handle notarization, making it fast, secure, and globally accessible.

While notarization is critical to ensuring the integrity of your documents, traditional methods can be time-consuming and administratively burdensome.

 Legitify offers a modern alternative through online notarization, combining compliance with speed, security, and convenience.

Key Advantages of Using Legitify:

1. Notarize from Anywhere: Whether you need to present a notarized shareholder structure to a bank or a cap table for an audit, Legitify allows you to complete the notarization process fully online, no travel or in-person meetings required.
2. Cross-Border Compliance: Meet jurisdictional requirements across Europe and beyond. Legitify ensures your notarized documents meet both regulatory and institutional requirements, making it easier to operate across borders.
3. Reduce Administrative Burden: Legitify enables faster turnaround with user-friendly scheduling, digital workflows, and real-time tracking. Useful for urgent corporate transactions and regulatory filings.
4. Ensure Security and Auditability: When sharing sensitive ownership data, security is critical. Legitify applies end-to-end encryption, identity verification, and secure digital signatures to protect your information throughout the process.

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Whether you need a certified shareholder structure, and/or a notarized cap-table  for a bank, or a regulator, Legitify provides the tools to execute with confidence and legal certainty.

In today’s business environment, where compliance, transparency, and due diligence are non-negotiable, companies must ensure their corporate ownership documents are not only accurate but legally verifiable. Understanding the nuances between shareholder structures and cap tables, and when notarization is necessary, empowers founders, directors, and legal counsel to operate with greater agility and lower legal risk.

Notarize your shareholder structure or cap table the smarter way, securely, remotely, and compliantly, with Legitify. Get started at www.legitify.eu.