Shareholder Rights: Economic, Political, and Preferential Shares
Action as a Right: Linking Rights to Action
Acquiring shares means adhering to the rules of the society in which the company is integrated. This can be achieved in two ways:
- Original Form: Participation in the foundation or capital increase through share subscription.
- Derivative Form: Acquisition of shares transferred by another partner.
Rights multiply with the number of shares held. While the law mandates equal rights for shares of the same class, it allows for different classes, such as:
- Ordinary Shares
- Preferred Stock: Shares with privileges over ordinary shares.
Special shares like “no vote” and “rescue” shares also exist, deviating from ordinary shares.
Enunciation of Key Shareholder Rights
Rights are defined by law, statutes, and can sometimes be repealed. They are classified based on:
- Majority Submission: Common vs. special rights.
- Exercise Ability: Individual vs. minority rights.
- Content: Economic (property) vs. political rights.
Statement of Shareholder Rights
- Profit Participation: Right to dividends, lapsing after 5 years.
- Equity Participation: Right to share in liquidation proceeds, proportional to nominal share value.
- Preferential Subscription Rights: Right to subscribe to new shares or convertible bonds proportionally.
- Attendance and Voting at General Meetings: Proportional voting based on share’s nominal value.
- Information Rights: Access to documents and clarification on agenda items.
- Challenge of Social Arrangements: Ability to challenge void or voidable agreements.
Preferred Stock
The law allows for different share classes, including preferred stock with special rights. These can be created at founding or later, requiring agreement from existing shareholders if their rights are affected.