Share

This term refers to the law of the country selected below.

  Czech Republic

What is meant by the term ‘share’?

A share is a security or book-entry security which confers upon the shareholder, as a partner, the right to participate – in accordance with the Act and the company’s articles of association – in the management of the company, its profits or the liquidation proceeds upon its dissolution with liquidation.

What types of shares are there?

By form:

Registered shares: These are issued to a specific person (whether a natural or legal person); they are transferred by endorsement and notification to the company.

Bearer shares: These are freely transferable; in the Czech Republic, they may only be issued as book-entry securities or immobilised securities.

Registered shares are entered in the register of shareholders maintained by the company. If the company has issued book-entry shares, the articles of association may stipulate that the register of shareholders is replaced by a register of book-entry securities.

By character:

Certificated shares and book-entry shares registered with the Central Securities Depository.

By the rights attached to the shares:

Ordinary shares: These are the basic type, carrying the right to vote at general meetings, to a share in profits in the form of dividends, and to a share in the liquidation proceeds. They carry no preferential or special rights.

Preference shares: These shares carry a preferential right to a share in profits or in the liquidation proceeds, but the articles of association may restrict or completely exclude the right to vote.