If you are a corporation, then you must use a stock ledger to track who owns what stock in your company. This allows you to know the ownership percentage of each investor. Any time there is a transaction dealing with the stock, you must write down: the stock certificate number; shareholder name; full address of the shareholder; number of shares; class of shares; date of purchase; and consideration given. Then, at any time, you can look to your ledger and determine a person's exact ownership interest.
Record the transaction. Write down the stock certificate number; shareholder name; full address of the shareholder; number of shares; class of shares; date of purchase; and consideration given, each time a transaction takes place. For example, assume Bob Doe spends $50,000 buying 20 shares of Class A stock from John Stevens on January 1. You would need to record each of these items on a transaction line. This allows you to track the stock on a daily basis.
Find the amount of stock owned by a given person. Go through each line of your records and highlight every transaction that occurred in that person's name. After highlighting all the stock transactions, add together those in which he purchased stock and subtract those in which he sold stock.
Use for journal entries. If you are using the accrual accounting system, then you can look at the details of each transaction and apply the Generally Accepted Accounting Principles to properly record the transaction in your general ledger.
Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.