Stock

What is a stock?

On the one hand, a stock is defined as a share in the authorized capital of a corporation, or as membership in the corporation and the associated rights (entitlement to net income, the right to participate in the annual shareholders’ meeting, the right to information, subscription rights, etc.). On the other hand, a stock certificate is a security that certifies this membership right.

What types of shares are there?

There are various types of shares: For example, a distinction is made between bearer shares and registered shares, depending on whether the shares are issued in the bearer’s name or in a specific name. In principle, shares have been required to be registered since 2011. The issuance of bearer shares is now permitted only if the company is publicly traded or if the articles of incorporation provide that the shares are to be admitted to trading on a stock exchange. Bearer shares must be represented by a global certificate. Furthermore, publicly traded corporations are required to file the global certificate. From the perspective of voting rights, a distinction can be made between common stock and non-voting preferred stock. Par value shares are issued at a specific par value, which must be at least one euro or a multiple thereof. In contrast, fractional shares have no par value. The share of the company associated with them is determined by the number of shares issued. However, the proportionate amount of the share capital attributable to a single no-par-value share must be at least one euro.

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