Three differences between preferred and common shares. Preferred shares (PA) Preferred shares placement

The charter of a non-public JSC does not provide for preferred shares. How to release them? I would like to know the procedure step by step.

Answer

Regulation of the Bank of Russia of August 11, 2014 N 428-P (as revised on December 18, 2018) "On the standards for the issue of securities, the procedure for state registration of an issue (additional issue) of emissive securities, state registration of reports on results ...

Chapter 50. Specifics of the placement of securities upon reorganization of legal entities

50.1. The decision on reorganization, as well as agreements on mergers and acquisitions, if these agreements provide for the consolidation and splitting of shares, may provide for a conversion ratio (distribution ratio) of shares, calculated taking into account the results of their consolidation and splitting, which at the time of their adoption (approval) are not yet implemented. Decisions to split and consolidate shares, as well as decisions to reorganize, can be made simultaneously.

50.2. Shares on reorganization can only be converted into shares. In this case, ordinary shares can be converted only into ordinary shares, and preferred shares - into ordinary or preferred shares.

Issuer's bonds and options can be converted into bonds and options of the issuer, respectively. In this case, one bond must be converted into one bond providing the same rights, and one issuer's option - into one issuer's option providing the same rights.

When converting into convertible bonds and options of the issuer, the number of shares into which they can be converted is determined in accordance with the share conversion ratio.

50.3. The placement of shares of a joint stock company, created as a result of reorganization, to shareholders - owners of shares of one category (type) of one joint stock company, reorganized in the form of a merger or acquisition, must be carried out on the same terms.

50.4. Securities of a legal entity created as a result of a merger, division, spin-off and transformation are considered to be placed in accordance with a decision on reorganization in the form of a merger, including a merger agreement, a decision on reorganization in the form of division, separation, transformation on the day of state registration of this legal entity. The securities of a legal entity to which the affiliation was made are considered to be placed in accordance with the decision on reorganization in the form of affiliation, including an affiliation agreement, on the day the entry on the termination of the affiliated legal entity is entered into the unified state register of legal entities.

50.5. Shares of a joint-stock company being acquired or reorganized in the form of a merger, spin-off or division, the demand for redemption of which was submitted and which, in accordance with the Federal Law "On Joint Stock Companies", were redeemed, but were not sold before the date of entry into the unified state register of legal entities of an entry on activities of the acquired joint-stock company or before the date of state registration of a joint-stock company created as a result of merger, spin-off or division, are not converted during reorganization and are not taken into account in the distribution of shares carried out during the spin-off.

50.6. Additional contributions and other payments for securities placed during the reorganization of a legal entity, as well as those related to such an offering, are not allowed, except for the paid acquisition of shares during the transformation into a joint-stock company of workers (people's enterprise).

50.7. Reorganizable entity is obliged to inform the registrar maintaining the register of securities owners of this legal entity about the fact of filing documents for state registration of a legal entity created as a result of such reorganization (about making an entry in the unified state register of legal entities about the termination of its activities), on the day of submission of documents to the body that carries out state registration of legal entities.

The legal entity created as a result of the reorganization (the legal entity to which the affiliation was made) is obliged to inform the registrar maintaining the register of securities holders of the reorganized legal entity of the fact of its state registration (on making an entry on the termination of the activity of the reorganized legal entity) on the day the corresponding entry in the unified state register of legal entities.

50.8. Securities of legal entities reorganized by way of accession, merger, division, spin-off and transformation are redeemed upon conversion.

50.9. Placement upon reorganization of shares, as a result of which the par value preferred shares of a joint-stock company created as a result of reorganization (a joint-stock company to which the merger was made) exceeds 25 percent of the size of its authorized capital, is prohibited.

50.10. Authorized capital a joint stock company created as a result of the reorganization may be more (less) the amount of the authorized capital of the joint stock companies participating in such a reorganization, as well as more (less) the authorized capital (share capital, mutual fund, authorized fund) of the legal entity transformed into it.

The amount of the authorized capital of joint stock companies created as a result of the division may be more (less) than the authorized capital of the joint stock company reorganized by such division.

50.11. The authorized capital of a joint-stock company, created as a result of the spin-off, is formed by reducing the charter capital and (or) at the expense of other own funds (including additional capital, retained earnings and others) of the joint-stock company from which the spin-off was made.

The authorized capital of joint stock companies created as a result of a merger or division is formed at the expense of the authorized capital and (or) at the expense of other own funds (including additional capital, retained earnings and other) of joint stock companies reorganized through such a merger or division.

The amount of the increase in the charter capital of the joint-stock company to which the merger was made is formed at the expense of the charter capital of the affiliated joint-stock company and (or) at the expense of other own funds (including at the expense of additional capital, retained earnings and others) of the joint-stock company to which the merger was made , and (or) an affiliated joint stock company.

The authorized capital of a joint-stock company, created as a result of the transformation, is formed at the expense of the authorized (joint-stock) capital (mutual fund, authorized fund) and (or) at the expense of other own funds (including due to additional capital, retained earnings and others) of the legal entity reorganized by such a transformation.

50.12. Reorganization of a joint-stock company in the form of a merger or acquisition with the participation of a legal entity of another organizational legal form is allowed in the cases established federal laws... Reorganization of a joint-stock company in the form of separation or division, during which a new legal entity of a different organizational legal form is formed, is allowed in cases established by federal laws.

A share is an equity security that secures the rights of its owner (shareholder) to receive part of the profit of a JSC in the form of dividends, to participate in the management of a JSC and to a part of the property remaining after its liquidation (Article 2 of the Federal Law of 22.04.1996 N 39-FZ " On the securities market ").

Distinguish between ordinary and preferred shares, distributed by open or closed subscription. The owners of the company's ordinary shares can participate in the general meeting of shareholders (hereinafter referred to as the General Meeting of Shareholders), have the right to vote on all issues of its competence and the right to receive dividends, and in the event of the liquidation of the JSC they have the right to receive part of the property (Article 31 of the Federal Law of December 26, 1995 year N 208-FZ). Each ordinary share gives its owner the same amount of rights and is not subject to conversion into preferred shares and other securities.

JSCs can issue preferred shares of several types, and the company's charter must determine the size of the dividend and (or) the cost paid upon liquidation of the company (liquidation value) on preferred shares of each type. The order of payment of dividends and the liquidation value of each type of preferred shares are determined.

Distinguish between cumulative and convertible shares. On preferred cumulative shares, the unpaid or incompletely paid dividend is accumulated and paid no later than the term determined by the charter of the JSC.

The charter of the company may provide for the conversion of preferred shares of a certain type into ordinary shares or preferred shares of other types at the request of shareholders - their owners, or the conversion of all shares of this type within the period specified by the charter of the company. Conversion of preferred shares into bonds and other securities, with the exception of shares, is not allowed. Conversion of preferred shares into ordinary shares and preferred shares of other types is allowed only if it is provided for by the charter of the company, as well as during the reorganization of the company.

Shareholders - holders of preference shares of a certain type, the amount of the dividend for which is determined in the company's charter, with the exception of shareholders - holders of preference cumulative shares, have the right to participate in the GMS with the right to vote on all issues of its competence, starting from the meeting following the annual GMS, which, regardless of the reasons, no decision was made to pay dividends or a decision was made to pay incomplete dividends on preferred shares of this type. The right of shareholders - owners of preference shares of this type to participate in the GMS ceases from the moment of the first payment of dividends on the said shares in full.

Shareholders - holders of cumulative preference shares of a certain type have the right to participate in the GMS with the right to vote on all issues of its competence, starting from the meeting following the annual GMS, at which a decision was to be made on the payment of these shares in full amount of accumulated dividends, if no such decision was made, or a decision was made on incomplete payment of dividends. The right of shareholders - owners of cumulative preference shares of a certain type to participate in the GMS ceases from the moment of payment of all dividends accumulated on the said shares in full.

Often, organizations in the implementation of financial and economic activities invest free funds in securities (including shares) of other enterprises. This type of investment refers to financial investments (clause 3 of the Accounting Regulations "Accounting financial investments"PBU 19/02, approved by Order of the Ministry of Finance of the Russian Federation of December 10, 2003 N 126n).

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Several thousand shares are traded on world exchanges various companies... In Russia, the Moscow Exchange has an order of magnitude less - only a few hundred. Some companies have two types of shares in circulation at the same time: ordinary and preferred. Several such examples: Sberbank, Rostelecom, Surgutneftegaz, Rollman, Bashneft. And if you want to purchase these securities and become a co-owner of a piece of business, then a natural question arises: "What shares to choose?" How do ordinary shares differ from preferred shares?

Where do the shares come from?

A share is a security that gives its owner the right to a part of the business, the right to vote in management and receive dividends. Of course, in proportion to the share of ownership of the total issued assets.

For a company, the issuance and sale of shares for free circulation is beneficial, but there are also particular disadvantages.

Shares are issued to raise additional funds for the development of their business. In some cases, just to get the cash flow. Moreover, this money will not need to be given. Just money out of thin air.

At the same time, by transferring shares to “the wrong hands”, the company loses part of its votes in resolving key management issues. A large stake can be acquired by competitors or large investors in order to influence the decision of the board of directors in key moments.

The second significant drawback is the need to constantly share cash flows in the form of profit and distribute it among shareholders.

Considering these factors, two types of shares can be issued on the market: ordinary and preferred. By combining the release of both assets in certain proportions, you can get all the benefits with minimal disadvantages:

• provide the necessary cash flow to expand the business;
• retain a controlling stake and a casting vote on the board of directors;
• reduce to a minimum the costs associated with the payment of dividends.

Types of shares

What do shares give to investors? First of all, it is, of course, the possibility of making a profit. It can form from:

• growth in the market value of shares (bought for 100, after 3 years sold for 150 rubles);
• receiving dividends.

Depending on the type of stock, the main locomotive for making a profit can be shifted either towards an increase in value or receipt of dividends.

Ordinary shares

Holders of ordinary shares can count on:

1. Voting rights in management of the board of directors. But for private investors with a rather modest portfolio, this parameter is not so important.
2. The right to receive dividends. The decisions on payment and its amount are made by the board of directors based on the received profit, the current financial situation company and further plans for the development of the company. The decision can be either positive or negative.
3. Receiving part of the company's value upon liquidation.

According to Russian law, the share of preferred shares in the authorized capital should not exceed 25% of the total issue.

Most investors buying ordinary shares hope for their further growth in the future. And receiving dividends is a kind of additional bonus.

But you can always find companies that pay decent dividends on common shares. In some cases, even more than the preferred shares of other companies bring.

Preference shares

Among the disadvantages is that the owners do not have the right to vote in the management of the company. Of the merits - the owners of preferred shares have the primary right to receive cash payments in case of bankruptcy of the company among shareholders.

But that's not the point. Unlike ordinary shares, preferred shares give the right to receive permanent dividends. During the entire time that the company is working, investors make a profit. The size is determined by many parameters. The basis is fixed in the charter of the enterprise. Holders of preferred shares (as preferred shares are called) have the primary right to receive dividends. The payment procedure can be once a year, six months, less often once a quarter.

Sberbank's charter stipulates dividend payments at a rate of 20% of net profit. Rostelecom, after changing its dividend policy, promises to pay at least 75% of the free cash flow and to allocate at least 45 billion rubles for payments for 3 years.

Conventionally preferred stock is a cross between common stocks and bonds. But they have all the advantages of both securities:

1. Receiving fixed income in the form of dividends is similar. But if bonds have a limited circulation period, then Prefs do not have such a limitation. There are companies that have been paying dividends for 50-80 years. It is not a bad option to acquire permanent passive income that your descendants (children, grandchildren) can also use.
2. Purchase of a stake in the company with the hope of further growth and development, which will certainly have a positive effect on the growth of quotations.

What to choose for an investor

At the moment, there are not many preferred shares on the Russian market. Only a few dozen. The majority are ordinary shares. But if you are counting on receiving dividends, then you can take a closer look at them.

The lack of company prefs in circulation does not mean that companies do not pay their shareholders. Many even pay much higher than their preferred stock counterparts.

As an example, consider a few of the leading common shares of companies traded on the MICEX and regularly paying dividends to their shareholders.

Yield means the amount of paid out profit from the share price on the day of the register closing.

And here are the average payments on preferred shares:

Surgutneftegaz paid one of the largest dividends on the Russian market on preferred shares. For 2015-2016 holders received a profit of 7-8 rubles per share, which corresponded to a yield of 18-24%. Subsequently, due to losses, the amount of dividend payments was reduced to a symbolic 60 kopecks, which amounted to approximately 2% of the yield.

As you can see, there is practically no particular difference for us private investors. Both of them pay. Of course, you need to analyze a little the amount of payments in recent years, the financial stability and development potential of the company.

Information on the amount of paid and planned dividends can be found on the websites of leading brokers. RBC also has it. But I like the statistics on this service - dohod.ru/ik/analytics/dividend.

Difference between preferred and ordinary shares

And if you choose between two securities of the same company? Who should you choose? Take preferred shares with a view to dividends. Or ordinary shares with the hope of a faster rise in quotations.

Consider, for example, Sberbank shares - common and preferred.

The charts below show the bank's quotes on the stock exchange for the last 5 years.

During this time, preferred shares have grown by as much as 101% or 2 times. According to the usual, the growth was 120%.

But during this time, the owners of two types of assets received annual dividends:

Taking into account the fact that the initial cost of common shares was 25% higher than the preferred shares, we get that for the same invested capital, the net profit without dividends was:

• Ordinary shares - 113%
• Preferred shares - 144%

It turns out that in terms of the profitability of preferred shares, it is a more profitable option than ordinary shares. At least on the example of Sberbank. But here we missed one important point that can greatly affect the final profit of a long-term investor.

Dividends and taxes on shares - impact on profit

Many diligently avoid having in their portfolio stocks that regularly pay dividends. It is believed that if a company cannot think of anything better than distributing profits to its shareholders, it is not very efficient in its management and development. Money to expand a business can provide a much higher return.

The second point is taxes. We are obliged to give 13% of the profit received to the state. As a result, this reduces the final profitability. This is especially noticeable at long intervals - 5-10-15 years and more.

For example. Receiving an annual profit of 12% in the form of dividends, 13% must be paid in taxes. As a result, the real profitability will be 10.4%. And so every year. But if the main profitability is focused on the growth of quotations, without receiving dividend payments, then until you sell the shares, you can not pay tax.

What will it give in terms of profitability?

Buying shares for 15 years with an average growth of quotations during this time - 12% per year, by the end of the term the profit will be 447%.

The same without growth, but with receiving dividends - 12% per year, but after deducting tax - 10.44%. By the end of the term, the profit is 317%.

Result: the difference in profitability was 40%.

Finally

Preferred shares generate a stable annual income. Lack of the right to vote in the management of the company when buying Prefs is not a significant loss for us. When choosing, first of all, you need to be guided by the amount of dividend payments. And it is not least important - their stability. We need to analyze the statistics for the past few years.

Ideally, it should be flat, without significant jumps downward in dividends and grow slightly every year. This will speak of business development and good chances for continued high payments in the future.

Correctly chosen common shares can give the investor a good return in the form of growth in market value in the future. Lack of dividends is not that important. The entire cash flow will work within the company and, if used correctly, can give impetus to further development and, as a consequence, increase the company's capitalization on the stock market.

Preference shares - This is a special type of equity securities, which, unlike ordinary shares, have special rights, but also have a number of specific restrictions.

Preferred shares are a widespread financial instrument in Russia and in the world.

It allows the owner to receive a guaranteed income based on the dividend rates offered by the issuer of the securities.

Also, in some cases, the holder of such shares can influence the company's development strategy.

Benefits of preferred shares

Preferred shares have a number of advantages for the investor when compared to conventional securities.

First, almost always the owner of preferred shares is guaranteed some income.

Namely, fixed income is accrued on preferred shares, in contrast to ordinary shares, which depend on the profit of a joint stock company.

However, dividends are not paid if the company incurs losses.

Secondly, funds for the payment of dividends are allocated to the holders of such securities as a matter of priority.

That is, the holders of preferred shares also have the right to receive a part of the property of the joint-stock company in the event of its liquidation before it is divided among other owners.

Third, dividends on preferred shares are usually fixed in the total net income.

In addition, these shareholders may have additional rights specified in the statutory documents of the company.

For example, they can, subject to certain conditions, convert their preferred shares to.

Disadvantages of preferred shares

There are also disadvantages of owning preferred shares:

The issuing company may demand the share back from the shareholder without explaining the reasons, while fully compensating for the damage with interest;

Preferred shares often do not carry voting rights. That is, the holders of privileged rights are deprived of the right to vote and, thus, are deprived of the opportunity to participate in the management process of a joint-stock company and make decisions important for the company;

Fixed dividend amount. Often the amount of dividends is indicated when issuing securities of this type and does not depend on the size of the company's profit, which with an increase in the profitability of the business entails a proportional decrease in the profitability of these securities.

What is the difference between preferred shares and ordinary shares

The very name “preferred” shares means that such shares provide additional opportunities and rights, so to speak, a special status.

As a rule, these benefits include the payment of guaranteed dividends.

That is, the owner of preferred shares will receive payments regardless of how the shareholders are doing - the joint-stock company will receive profit or loss.

Also, unlike ordinary shares, preferred shares give the right to receive a share of the company's property after its liquidation.

That is, the preferred shareholder will receive a predetermined amount from the joint stock company.

For such privileges, the owner of preferred shares is deprived of the opportunity to vote and influence the decisions of the joint stock company.

Thus, the owner of such shares is an indifferent investor, so to speak, not a co-owner of the business, which cannot be said about those who own ordinary shares.

However, some cases of privilege may provide just an impact on the affairs of the firm. In this case, the charter of the joint-stock company provides for the ratio of votes of the owners of ordinary and preferred shares, for example, 1: 2. So, it turns out that the owner of one share with the privilege has two votes.

Certain cases provide for the right to influence the affairs of the firm and participate in meetings for those owners who cannot vote.

Such cases are also provided by law to protect the interests of the owners. Thus, the owners of all the shares issued by the company can influence decisions related to the liquidation or reorganization of the company.

There are also issues regarding shareholders that cannot be resolved without their participation. For example, when the guaranteed dividends are reduced.

If the joint-stock company is unable to pay the guaranteed dividends, then the preferred shareholder gets the full right to participate in the company's meetings on all issues.

It is also worth noting that privileged shares can be convertible and cumulative.

Rights of owners of preferred shares

Holders of preferred securities, along with the main shareholders, receive a share in the authorized capital of the company and have the right to attend general meetings.

Despite the fact that the holder of such securities does not have the right to vote, he can participate in meetings of shareholders, claim a share of the property in the event of the liquidation of the organization.

Voting Admission

In general, holders of preferred shares are not allowed to vote.

An exception may be cases when decisions taken during the relevant negotiations affect the personal interests of the owners of securities.

In particular, if there are particularly important issues on the agenda of the meeting, holders of preferred assets can vote. These may be issues reflecting the procedure for a possible reorganization of a company or liquidation of a company, those related to the introduction of amendments to the charter, which are related to the rights of holders of preferred shares or, for example, to the payment of dividends.

Types of preferred shares

Preferred shares are divided into classes with different scope of rights.

According to the law Russian Federation On Joint Stock Companies, there are basically two main types of preferred shares: cumulative and convertible.

Dividends on cumulative preference shares may not be paid in ordinary reporting periods by the decision of the general meeting of shareholders, if there is no profit or it is completely directed to the development of the company.

At the same time, the obligation to pay the lost income remains.

Dividends are accumulated and paid after stabilization of the financial position of the joint stock company.

That is, the feature of cumulative preferred shares is the accumulation of dividends. Holders of cumulative preference shares have the right to accumulate unpaid dividends, accrue and pay them in the next period after the missed period. In this case, dividends are not subject to periodic payment.

The holder of the cumulative share acquires the right to vote at the shareholders' meeting for the period during which he did not receive dividends, and loses it after the payment of dividends.

Convertible preference shares can be exchanged by the owner of the shares for a specified period for ordinary shares or another type of preference shares.

When such securities are issued, the rate, proportionality and exchange period are determined.

There are also the following types of preferred shares:

non-cumulative, for which unpaid dividends are not added to dividends next years;

unconverted, which cannot change their status;

with participation interests that entitle the holders of these shares to receive additional dividends in excess of the stipulated dividends.

Outcome

The advantages of preferred shares are the shareholder's right:

receive a fixed income or income in the form of a percentage of the value of shares, or some specific amount money, which is paid regardless of the results of the activities of the joint stock company;

to receive dividends in the first place;

for preferential participation after the satisfaction of creditors' claims in the distribution of the property remaining with the joint-stock company upon its liquidation;

for an additional payment, if the amount of dividends paid on ordinary shares exceeds the amount of dividends paid on preferred shares.

Note that if you want to invest in a long-term investment, then the way to purchase preferred shares is the most appropriate.

Still have questions about accounting and taxes? Ask them on the accounting forum.

Preferred shares: details for the accountant

• Justification of receipts in terms of financial and economic activities

  2000 ordinary shares and 800 preferred shares. According to the forecasts of the joint-stock company, by ... pcs. with par value of 1 thousand rubles, preference shares - 500 thousand units. with a par value of 1 ... thousand rubles. Dividends on preferred shares amount to 8% of the par share ... let's calculate the annual amount of dividends on preferred shares: Receipts plan 2019 (2020, 2021 ...

• Key indicators of the economic power of the enterprise and the level of performance of its owner and management team