There are two basic types of shares:
registered shares which are made out
to the owner's name and bearer shares,
where the holder of the share in the corporation
is unknown but can nevertheless enforce his rights as a shareholder. Shares can have other properties
Listed companies often give their employees the opportunity to buy shares in the company at a
preferential price below the current market price. There can be a variety of reasons for issuing
employee shares, including increasing
the number of shareholders, rewarding loyalty to the company, giving employees a share in the profits
and allowing them to participate in the management of the company. In rare cases it is also used as a
means of raising capital.
Companies may buy their own shares. The nominal value of these Treasury shares may not exceed
10% of the share capital. The voting rights attaching to Treasury shares are suspended
and the company therefore cannot influence the vote at the
general meeting of shareholders.
A company may buy its own shares for a number of reasons, for example to invest surplus funds, or to protect
itself from an unwanted takeover.
The disadvantage of Treasury shares is that in addition to the decline in the number of free-floating shares
the company's liquidity (available cash reserves)
also declines. As the share buyback must be paid for by the company, its available cash levels decline.
The impact on the value of the shares is difficult to predict. Share buybacks are often
viewed favourably by analysts.
Ordinary shares (US: common stock) may be bearer
or registered shares. Ordinary shares are shares embodying the membership and proprietary rights
defined by the Swiss Code of Obligations.
Preference shares (or
"preferred shares") confer certain privileges with regard to
the shareholder's proprietary rights. These privileges are set out in the articles of association and may
include privileges in connection with the distribution of profits (a higher dividend, the
"preferred dividend"), the dissolution and liquidation of the company and
the exercise of Subscription rights.
Preference shares are rare in Switzerland.