Ordinary shares

Ordinary shares

Ordinary share is a security, which emits the joint-stock company. Possession of this security not only gives the right to receive dividends (the dividend is not always guaranteed for common shares), but also the right to participate in the voting at a shareholders ' meeting and in many ways most cases in the management of the Board of Directors (Supervisory Board). On average, in contrast to most types of securities, common stock bring high income in the long term due to increases in capital.
Ordinary shares in the financial market are a very important tool, they play a decisive role in the formation of financial resources for the various joint-stock companies. According to the Russian legislation, the share of these shares in the authorized capital should not be less than 75%. Mainly in the capital of the companies the weight of ordinary shares are considerably higher. The authorized capital of many companies only consists of ordinary shares.
Ordinary shares
One of the main peculiarities of such securities is the fact that in most cases the shareholder may not require a joint stock company's return to it of the amount of the Deposit. This allows a joint stock company freely manage belonging to him of the capital, not fearing what part of it may have to pay back at the request of shareholders. This suggests that the ordinary shares are perpetual securities securities, which are not available for some specified period of time. Shares lose their status only after it ceased to exist as a joint stock company. This can happen by a court decision on forced liquidation of the enterprise at the expense of recognizing it bankrupt and no longer suitable for reorganization procedures, as well as due to the absorption or merging it with another firm and voluntary liquidation of the company.
In order to attract additional financial resources joint-stock company may come to the stock market with newly issued securities. In taking such a decision, the company should ask the question, what kind of capital is more preferable: own or borrowed. If a joint stock company capital needs for a certain time, and later going to return to its investors with relevant interest, in this case, the bonds would be issued, which in future must be repaid. Bonds are profitable for the enterprises of the fact that in the capital dilution does not occur, that is, no additional shares or new co-owners of the company, which shall have the right to participate in management (joint stock company). The disadvantage of bonds is the fact that sooner or later borrowed capital will have to return or in other case the bonds converted into shares and the dilution of capital. Among other things, debt securities, and require regularly pay a fixed percentage.
Additionally issue shares, the company may only within the limits of declared their number. The new issue - the decision is taken by the shareholders meeting or the Board of Directors, if it is provided for the Charter. The preferred option is the second since only a small number of competent persons may possess the required information regarding the limit of the announced number of shares specified in the articles of Association or determined by the shareholders ' meeting. The share issue will allow to increase the share capital, which is required for the development, expansion and modernization of production. Issue of shares is not allowed in case of covering the losses, incurred by the enterprises. To the additional shares issue in the sale, a joint stock company shall establish the terms of the issue, after which register in the financial institutions in the new issue of shares.
Ordinary shares in countries with well-developed infrastructure
Those countries with a well-developed infrastructure of the stock market, there are different types of ordinary shares, which may restrict the rights of shareholders. In order to prevent the acquisition of the controlling interest, the Issuer shall issue of ordinary shares with limited voting rights. Such shares are limited.
1) non-voting shares at the shareholders ' meeting did not give voting rights to their owners.
2) subordinate shares may give the holder the right to vote, but to a lesser extent, in comparison with the ordinary shares of another type, issued by a joint stock company.
3) shares with limited voting rights may give the holder the right to vote, but in the presence of a certain number of shares.

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