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1. What is a title in a company?
Corporate social titles, also called shares or shares, represent the property of a company and are owned by its stockholders or associates. These titles confer property rights, such as participation in the company's profits and decisions at general meetings. They are essential for raising capital, sharing responsibilities, and distributing profits across society. Investors buy these shares in the hope of achieving a return on their investments. They can be traded on public financial markets or held in private companies.
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2. What are the different types of corporate shares?
Shares and shares are property titles representing the share capital of a company. They confer rights such as participation in social life, Voting at meetings and the receipt of dividends. However, holding these titles involves obligations and responsibilities. Most shareholders have limited financial responsibility, with their responsibilities limited to the value of their shares. On the other hand, a partner who is indefinitely liable may be held personally liable for the company's debts. Shares vary according to their form, the nature of their contribution, their voting rights and their listing on the stock exchange. Some shares may be listed on a stock exchange, while others are not, and may be issued in cash or as a contribution. There are also ordinary shares, preferred shares, with or without voting rights, with single, double or multiple voting rights, as well as capital and enjoyment shares. These differences depend on the type of company that issues the shares.
Concerning shares as well as shares: the common point between these two types of securities is that they are property titles relating to the share capital of a company.
In practice, they give their holders the right to participate in the social life of the company and to exercise their right to vote (in particular at shareholder meetings) and give shareholders the opportunity to distribute profits.
However, the possession of shares or shares imposes various obligations on their holders.
Most shareholders have limited liability in the sense that their financial liability to the company is limited to the value of their shares or initial investment. This means that if the company is facing debts or obligations, shareholders are generally not personally liable beyond their investments in the company. Their personal assets are not exposed in the event of a bankruptcy of the company.
An indefinitely liable partner in a corporation is generally considered to be a partner who assumes unlimited liability for the debts and obligations of the company. This means that he can be held personally liable in the event of a company financial problem, and his personal assets can be used to satisfy the company's creditors. The unlimited liability of an indefinitely liable partner may vary depending on the legal structure of the company and applicable laws.
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3. What are the different types of actions?
The different types of actions differ according to: Their forms, the nature of the contribution they represent, and the extent of the rights they grant.
Registered shares/bearer shares
Shares constitute “transferable securities”, that is to say, negotiable securities that must be registered in person:
- In accounts opened with the company through a registered authority or a shared registration service (DEEP): in this case they are said to be “nominal”.
- In accounts opened with financial intermediaries: in this case they are called “bearer”.
Listed/unlisted shares
When it can be bought and sold on the stock exchange, it is called a “listed” stock. We speak of “unlisted” values in the opposite context.
Cash/contribution actions
An action may refer to:
- A cash contribution made by a shareholder, which is equivalent to a financial contribution by the shareholder to the capital of the company: this is called a “cash” share, the amount of which is generally paid up in cash.
- The contribution in kind, which corresponds to a contribution of goods rather than a sum of money: we then speak of “contribution” actions.
Common shares/preferred shares
By “preferred shares” we mean shares that give special rights to their holders. These can be temporary or permanent.
Shares with/without voting rights
Subject to applicable regulations, shares may be issued with or without voting rights. In the latter case, they do not give their holders the opportunity to participate in the collective decisions of society.
Shares with single, double or multiple voting rights
Shares issued by a corporation can also give owners double or multiple voting rights in collective decisions.
Capital and enjoyment shares
Enjoyment shares correspond to shares whose amount has been amortized: this means that the company has repaid its initial amount by drawing on its reserves or profits.
Despite these fundamental similarities, shares have numerous differences, especially related to the type of company that issues the shares.
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4. What are the different types of shares depending on the form of the company?
Different types of business structures include:
- SA (Joint stock company): Shareholders have limited liability, which is often used by publicly traded companies.
- SARL (Limited Liability Company) : Members have limited liability, may own shares in other companies.
- SNC (General Partnership) : Partners have unlimited liability and can hold shares in their collective name.
- SCS (Société en commandite simple) : Combining unlimited and limited liability, can own shares.
- SCA (Société en commandite par actions) : Combines unlimited and limited responsibilities, possible shareholders.
- Cooperative society : Owned and managed by members, using shares.
- Investment company : Created to manage an investment portfolio, investors hold shares or units.
- Holding company : Created to hold interests in other companies.
- SAS (Simplified Joint Stock Company) : Flexible structure for shareholders, can own shares in other companies.
- SA (Limited company) : Often used for large companies listed on the stock exchange, may hold shares of other companies.
Capital securities are held for long-term control, while investment securities are acquired for short-term gains.
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5. How do you hold the shares of your company?
Several possibilities are to be considered to hold the shares of a company:
- Hold the shares personally : It is the most common solution. Owning shares in a trading company in your own name is the most common solution chosen by entrepreneurs. It is suitable for most projects that do not require significant funding and have only a small number of partners or shareholders.
- Create a holding : This is the solution that is generally encountered in the context of business takeover projects. Owning company shares through a holding company is an option that is encountered in business acquisition projects as well as in certain creative projects bringing together multiple partners and investors.
- Investing through a PEA : Investing via a PEA has certain tax advantages, in particular, depending on the length of ownership, PEA withdrawals may be totally or partially exempt from IRPP, IRPP and social security contributions are exempt if the amounts received (dividend, capital gains from transfers, etc.) are reinvested.
- Mix several solutions : Last option, it is possible to mix the two solutions, namely to hold part of the shares through a holding company and the other part in their own name.
What are the methods of detention?
In most cases, the manager is also a partner or shareholder of the company. There are many ways to hold company shares that can have significant consequences.
Direct detention : The managing partner or shareholder is the direct owner of the shares.
Owning shares in companies remains a major challenge for managers. Since there are many standards, it may be necessary to seek the advice of a professional to find the most suitable solution.
However, leaders need to understand that each ownership model has its own pros and cons. This method of holding company shares offers taxpayers several advantages: under certain conditions, it is possible to benefit from a tax deduction equal to 25% of the interest paid when the company was acquired.
On the other hand, the direct ownership of shares in the company may be at a disadvantage if the taxpayer has no control over the amount of dividends distributed due to the minority nature of his stake. In this case, there may be a tax liability associated with receiving the dividend when it falls into a high-income tax bracket.
Indirect detention : the manager owns a holding company that itself owns the company's shares.
Owning a company's shares by a holding company continues to have several advantages: It allows you to manage your dividend payments. The taxpayer, who is the majority shareholder in the holding company, can determine the amount of dividends distributed according to his needs and his tax bracket. Undistributed amounts remain with the holding company until subsequent distributions;
When a holding company and an operating company form a financially integrated group, the holding company may deduct interest on loans intended for the purchase of securities;
A holding company facilitates the acquisition of a business by several buyers. In this hypothesis, the leverage effect allows managers to maintain a majority stake in the target company while bringing in new investors, in order to raise the financing necessary to acquire the company. It facilitates the transfer of operating companies.
Owning shares in a company remains a major challenge for managers. Since many standards exist, it may be necessary to seek professional advice to find the most suitable solution. However, managers need to understand that each ownership model has its own pros and cons.
The legislator, aware of the rise of blockchain in recent years, authorized the use of dematerialized registers of movements of unlisted securities. As a result, a register of dematerialized movements of securities has the same legal value as a paper register. Axiocap makes it possible to facilitate and secure maintaining records of movements of securities through a digital platform.
The dematerialization of title movement registers has five key advantages. First of all, it saves significant time and money, by eliminating paper-based management processes, physical travel, and by facilitating the consultation of data electronically. In addition, security is strengthened thanks to the anchoring on the blockchain, ensuring the authenticity and integrity of transactions. Information storage is becoming more optimal, freeing up physical space while ensuring the accessibility and long-term preservation of data. In addition, dematerialization promotes collaboration between stakeholders, simplifying the communication and consultation of information. Finally, it simplifies businesses by streamlining processes, reducing human errors and allowing more effective management of financial assets.
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