Registered shares

Registered shares are a type of share in which the individual shares are registered to their owners. Registered shares can be issued to natural persons or legal entities. The rights associated with a share are transferred by means of a written declaration of transfer, known as an endorsement. 

The alternative to registered shares are bearer shares, where the shareholder rights are transferred informally to the owners of the shares.
 
The fungibility, i.e. exchangeability, of the share is restricted by the entry of the owner in the share register of the stock corporation. This disadvantage can be largely eliminated by an endorsement in blank. Special regulations for the transfer of registered shares can be laid down in a company's articles of association.

Registered shares with restricted transferability are a special form of registered shares.

According to Section 10 (1) sentence 1 AktG, registered shares are the rule. The law states: “The shares are registered shares.”

This provision represents a change compared to the previous legal situation. Until the 2016 amendment to the German Stock Corporation Act, stock corporations were free to choose between bearer and registered shares. Today, however, registered shares are the standard form of securitization for shares.

Bearer shares can only be issued in two exceptional cases:

• If the company is listed on the stock exchange
• If, in the case of unlisted companies, the shareholder's right to individual securitization is excluded and the global certificate is deposited with an office specified in the law.

This amendment aims to create more transparency with regard to the shareholder structure. In the case of registered shares, shareholders are entered in the company's share register with their name, date of birth and address. This gives the public limited company a better overview of its shareholders and facilitates direct communication with shareholders.