Employees are the lifeblood of a company. Their satisfaction is essential for increased productivity and reduced absenteeism. Employee participation, especially co-ownership, is a powerful tool to achieve this, but the voting rights associated with shares can be a stumbling block. For those who recognize this challenge, certificates on shares are the ideal solution!
What are certificates on shares?
Certificates on shares are financial instruments that represent ownership of shares without direct control over the associated corporate rights. This means that significant decisions regarding business operations will remain in the hands of the board of the Trust Office Foundation (STAK). This includes changes to articles of association, access to sensitive corporate information, or the amount of dividends to be distributed.
What is the difference between a certificate on a share and a share?
While a share represents direct control over the corporation, a certificate only provides the economic ownership in the form of dividend payments and changes in the value of the underlying shares.
When are certificates on shares useful?
Certificates on shares are useful in several situations. Consider, for example, a family business in which part of the next generation does not want to be actively involved in business operations. Or the owner wants to gradually step back but still oversee operations. Or, as we often deal with: to make employees co-owners without burdening them with the complexity of direct control.
What are the types of certificates?
There are two types of certificates on shares to distinguish: transferable certificates and non-transferable certificates. The first type, transferable certificates, can be exchanged for actual shares at any time. With the second type, non-transferable certificates, this is not possible without the consent of the STAK.
What are the administrative or certification conditions?
The administrative conditions, also called certification conditions, are managed by the STAK. These conditions extensively describe the rights and obligations of certificate holders and the STAK. The design of these conditions is entirely flexible. An important point is often the rights of the meeting of certificate holders.
How does the certification of shares take place?
The certification of shares begins with the transfer of the shares in the company to an overarching STAK. This STAK will, in turn, issue certificates on these shares to the employees. It is precisely this structure that ensures the separation of economic interest and control.
What are the rights of certificate holders and the STAK?
Certificate holders are entitled to dividend payments and value development of the underlying shares, but they have no direct influence on decision-making within the company.
On the other hand, the STAK manages the shares on behalf of the certificate holders. The STAK will exercise the voting rights and ensure transparent administration.
More questions?
If your curiosity is piqued and you want to know more, we are ready to answer all your questions. For example, join our webinar, where you can ask us all your questions!