Chapter 5: classes of shares Flashcards
(21 cards)
common stock
admin (voting, info)
eco (dividend, liquidation)
mixed (preemptive, exit)
classes of shares
eco (preferred, tracking)
admin (non-voting, multiple voting)
mixed (blank check, saving shares)
DGCL 212
default OSOV but can override in charter
Art. 2351 ICC
non voting <50% of K
multiple voting max 3 votes
(+) dual classes shares
protect LT vision
attract investor
↓ mkt pressure
(-) dual classes shares
founder abuse power
min SH risk
weakens takeover
SH protection
class voting (art 2376 ICC)
preemptive right
loyalty shares
double voting, 2 years
loi florange 2014
loyalty shares auto (listed) and 2/3 (private)
breakthrough rule
limits voting power and multiple voting dont apply in SH meeting
(+) multiple voting shares
min protected
↑ stability
help K raising
incentive to get listed
(-) multiple voting shares
agency pb (controlling VS non-controlling)
↓ new investor
policing takeover
sunset clause
MV expire or convert to ordinary shares after a specified period or event.
EU 2024 MVS directive
comp listed on SME Growth Market can have dual class shares but with time-limit and require majority for corpo decision
attract founders and K
SH expropriation + takeover weak
EU law art 25
(public only) ↑ shares must be approve by SH meeting
EU law art 29
new shares for cash -> preemptive in proportion of current holding
art 145 consolidated law on finance
non-voting -> preemptive on same class
no non-voting issued -> preemptive on issued class
Limits on preemptive rigths (art 2441 ICC)
contribution in kind, corpo interest, employee compensation (25% without preemptive), listed 10% extra without preemptive.
MBCA
private: require approval for non-cash consideration and rpz +20% of voting power
listed: require if shift in control
stock exchange rule
approval require if listed issues +20% common stock
opt in & opt out
opt in = deny preemptive by default
opt out = grant preemptive by default
