Word or Excel for your share ledger? Here are the risks

Many companies start by keeping their share ledger in Word or Excel. It feels simple and fast, and above all better than letting it gather dust in a binder. But what does a share ledger actually require – and what risks arise when using tools that were never built for the task?

The purpose of the share ledger

At its core, a share ledger is a version control system. It is the company’s official register of who owns shares, how many they own, and how ownership has changed over time. The share ledger is not just an internal document, but a legal requirement and one of the most important records in a limited company.

Through the share ledger, both the company and its owners gain transparency and security. For shareholders, it provides assurance that their ownership is documented and recognized. For the company, it forms the basis for dividends, general meetings, and other ownership-related decisions. And for society at large, it creates a structure that strengthens legal certainty, facilitates capital raising, and makes it easier for investors, banks, and authorities to trust the information presented.

In short, the share ledger is a central part of the company’s infrastructure. It is intended to be a living record where every change is documented and can be traced over time. This ensures that it is always possible to see who owned what, when, and on what terms.

If you want to read more about what a share ledger is and why it is so important for a company, you can find our in-depth guide here: What is a share ledger? – A complete guide for business owners and investors

Word and Excel – Where the pitfalls arise

Starting out in Word or Excel can feel practical. Most people already have the software installed, it is quick to set up a document or spreadsheet, and compared to a binder it gives a sense that “things are under control.” The problem is that a share ledger is not just a list, but a system that must withstand both time and change. As ownership structures evolve, share issues are carried out, or shares are transferred, the limitations quickly become apparent.

Some of the most common risks include:‍

• Parallel registers: you end up maintaining both a share ledger and a separate ownership list (cap table), which quickly becomes unmanageable once there have been a few ownership changes or share issues.
• Manual numbering errors: shares and share holdings must be numbered manually, which almost always leads to mistakes. Building on top of this then creates new errors as a knock-on effect of not having done things correctly from the start.
• No single source of truth: different versions are circulated and saved under names like “final_version_final2.xlsx,” creating uncertainty among stakeholders, both in day-to-day work and in connection with share issues or company transfers.
• Time-consuming and costly corrections: errors are often discovered in connection with share issues or company transfers. At that point, expensive corrections are required, often with the help of law firms that charge tens of thousands of kronor for something that should have worked from the outset.

Taken together, this exposes the company to multiple risks, related both to significant costs and to disputes in sales or dividend distributions, where ownership relationships are unclear due to inadequate documentation. To understand why, we need to look at the three principles that a share ledger must always meet – it must be maintained, preserved, and kept available.

The three fundamental principles

1. The share ledger must be preserved

Maintaining a share ledger is not optional, but a legal requirement and a central part of the company’s legal structure. Despite its importance, it is often overlooked, and many companies attempt to solve the task with tools that are simply not designed for the purpose, such as Word and Excel. These are document and spreadsheet programs, not legal process tools.

Our experience from reviewing and managing share ledgers for more than 20 years shows that systematic deficiencies are the rule rather than the exception. In our recurring reviews over the years, we have seen that as many as nine out of ten companies have errors in their share ledger. This highlights how difficult it actually is to meet the most basic requirement: that the share ledger is maintained correctly.

2. The share ledger must be preserved

The second requirement concerns preservation. A share ledger is not a static file that can be “put away,” but an ongoing process that must remain correct, complete, and traceable over time. A single incorrect file does not meet the preservation requirement, and in practice a version chaos often arises where it becomes impossible to determine which version is actually the original.

On top of this come technical vulnerabilities. A crashed hard drive, a deleted folder, or a lost laptop can instantly erase years of history. And without a traceable log, it is impossible to show who did what, when, and why.

The consequence is that the company risks losing an unbroken history, facing higher audit and advisory costs, and ending up in difficult situations during capital raising, sales, or generational transfers.

3. The share ledger must be kept available

Availability is the third piece of the puzzle. This does not just mean that the document can be opened, but that the correct version can be shared quickly, securely, and clearly. If the content is deficient, the requirement is in practice not fulfilled.

In many organizations, an old printout in a binder is perceived as the “original,” while the file on the computer has been updated — or vice versa. Without role-based access, timestamps, and secure sharing, the process becomes person-dependent and vulnerable. The result is difficulty in providing the share ledger correctly and promptly upon request, conflicts when multiple versions circulate, and increased security risks when files are emailed back and forth.

What consequences does an incorrect share ledger create?

When the share ledger is not correct, the consequences quickly become tangible for the company:

• Disputes over inheritances, dividends, or distributions in company transfers
• Uncertainty around voting lists at general meetings, and thus risk exposure for historical decisions
• Significantly more difficult capital raising
• Low confidence from banks and other key stakeholders
• Limited ability to communicate effectively with shareholders
• Problems taking the company public when connecting to Euroclear, which requires a complete share ledger

There are also financial effects. Many companies underestimate what errors in the share ledger actually cost. When the share ledger is kept in Word or Excel, law firms are often tasked with correcting mistakes and bringing order to the versions. That work takes time, and invoices rarely specify what directly relates to the share ledger and what concerns other parts of the matter. The result is that companies pay tens of thousands of kronor for something that could have been avoided with a better system – without always understanding where the cost actually arose.

When the problems spread beyond the company

A deficient share ledger does not only affect the individual company. Our experience shows that errors and shortcomings are very common, and when they occur, the entire ecosystem of banks, investors, and authorities is affected. Transparency deteriorates, legal certainty is weakened, and capital allocation becomes less efficient. In practice, this leads to more duplicate work, higher costs, and reduced trust in the system as a whole.

This is also a sustainability issue. Less paper handling saves resources, and a correct, traceable share ledger strengthens transparency, GDPR compliance, and the foundation for good corporate governance.

Why you should replace Word and Excel

In summary, Word and Excel do not meet the legal and practical requirements of a share ledger. They create errors, complicate reviews, and risk legal non-compliance, with costs for both companies and society.

By moving to an event-based, version-secure, and permission-controlled way of working, daily operations become faster, transactions more secure, and the ability to build trust with the company’s stakeholders significantly stronger.

That is exactly where NVR makes a difference – not only by ensuring a correct share ledger, but also by facilitating collaboration both within the company and between different stakeholders. Everything is gathered in one place – from reporting and option management to ownership dialogue and corporate formalities.

Want to learn more? Keep reading, contact us, or book a demo today.