Types of Shares

The securities market is constantly developing. Shares are one of the most common types. In turn, they are divided into different types of shares.

In Russian practice, the shares appeared in the late 80's with the release of the first shares of labor collectives. They began to produce state, collective, leasing enterprises, public organizations. Then they represented a special certificate on making personal funds on an indefinite basis with the aim of assisting in the development of production. So they tried to interest the workers with the idea of public leadership. Such shares were not intended for circulation on the market in free form. The concept and types of shares have not yet been singled out.

On the other hand, enterprises of various subordination, partnerships, banks and economic associations have already begun to issue shares of their own enterprises, intended for legal entities. These shares were intended for sale on the secondary market. But at that time interest in them was very low.

Today, various types of shares enjoy the increased attention of those who are interested in them. Now the shares are issued not only in documentary, but also in non-documentary form. Documentary shares may be replaced by a certificate. With full payment of all securities, the shareholder can receive one certificate for all purchased shares.

Types of shares and their characteristics. Depending on their order of ownership, types of shares distinguish between registered and bearer shares. Under the law "On Joint Stock Companies" all papers of the joint-stock company must be registered. The law "On the Securities Market" gives the right to issue bearer shares in a strictly defined ratio with the standards set by the Federal Commission for the Securities Market.

Nominal . Their owner must be officially registered in a special register. In the event of the resale of such shares, the data of new owners are necessarily entered. Such shares are used to analyze the structure of shareholders, in order to stimulate them or vice versa to attract foreign investment.

Among the registered shares are vankul shares, they can be transferred to other owners only in the event of issuer permission. This is necessary to control the composition of shareholders in order to protect the financial independence of the issuer.

Bearer . They transfer to the other owner after a simple actual transfer.

Depending on the possible amount of income, these securities are divided into the following types of shares.

Privileged (preferential). They give the right to receive income on a priority basis in the form of dividends, as well as for priority participation in the separation of property of the joint-stock company in the event of its liquidation. They do not give any decisive vote in cases involving the conduct of business of the company.

These shares are cumulative (in case of an unstable financial condition of the company, dividends on them accumulate and can be issued only after improving the material situation); Revocable or refundable (which the joint-stock company may redeem upon the occurrence of special circumstances, for which the holders of securities are paid an increased premium).

Ordinary . The revenue for them depends on the size of the company's profit, its strategy and other factors. Ordinary shares may be non-voting, with voting rights, with limited voting rights, subordinate.

As joint-stock companies are open and closed , the types of shares differ according to this feature. The difference is that the shares of the company can be sold by their owners without agreement with other shareholders, and the shares of the company - only after appropriate approval. In addition, the shares of ZAO are issued only in the form of a closed issue. They are not offered for purchase to an unlimited number of persons. OJSC can conduct both open and closed issue.

The shares are divided into those placed and declared . Placed are securities that are already acquired by certain shareholders, declared - issued in addition to those placed.