Registered shares: preferred, cumulative, common, convertible and vinculized shares

Registered shares are securities issued in the name of a specific person and registered in the register of the shareholders’ company. In other words, these shares must bear the name of their owner.
This person is a full member of the company’s board of shareholders.

Registered shares can be sold and transferred in two ways

  1. Inclusion in the company’s register of data on change of the owner, issuance of the corresponding certificate to the new holder of shares.
  2. Making a transfer inscription on the certificate itself, after which it is also necessary to enter it into the register.

In addition to the data of the new owner, it is also necessary to indicate the date of transfer and certify it with the signature of an official. The transfer inscription on the reverse side of the share is called an endorsement.

Naturally, they have value only when they are in the hands of the registered owner, unlike bearer shares, the owner and beneficiary of which can be absolutely any unregistered person. The main purpose of the existence of registered shares is to keep strict account of the company’s shareholders and to avoid attracting undesirable capital to the company.

At the inception of the securities market, only registered shares existed.
If a company issues only registered shares and not preference shares, it raises its prestige considerably.

Types of registered shares

A subspecies of registered shares is vinculized shares. They can be transferred to third parties only with the authorization of the issuer-company, joint-stock company. The purpose of their issue is to precisely control the composition of shareholders. In essence, it is a tool to prohibit the sale and transfer of shares to undesirable persons.

Preferred shares are also registered, their owners have the right to receive dividends in a fixed and priority order. A subspecies of preferred stock is reversible stock, which can be exchanged for common stock at a predetermined ratio.
Registered ordinary (common) shares mean that their holders receive dividends on a residual basis after holders of preferred shares.

Cumulative shares are registered, preferred shares that give the right to receive dividends accumulated during the period when for any reason the company did not pay them.
Another type of registered shares is convertible shares, which can be exchanged for ordinary and preferred shares at a strictly fixed price on a specific specified date.

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