Type of shares

Type of shares

Types of shares or letter shares are shares to which a special right or obligation attaches or which are otherwise different from ordinary shares. We know the following types of shares, among others:

• non-voting shares;
• profitless shares;
• priority shares;
• preference shares;
• cumulative preference shares;
• letter shares with other rights and obligations or just combinations with the aforementioned types.

All these types of shares have meeting rights attached to them. With the exception of non-voting shares, all these shares carry voting rights in the general meeting.

Tracking stock can be created via letter shares, for example. These are shares that only give the right to profits generated by certain activities of the company. This can be interesting if a fiscal unity needs to be maintained but someone as a shareholder only needs to share in the profits of a certain participation.

It is also possible through letter shares to create specific profit reserves or share premium reserves per share type. Or to ensure that each shareholder can appoint and dismiss their own director.

For more information on type of shares and their advantages and disadvantages, please contact us. We will be happy to help.