Social participation

economic-dictionary

The social shares are the aliquot and indivisible parts that make up a limited liability company. They represent the contributions to the capital stock by its partners or participants.

Limited liability commercial companies divide their capital stock by means of shares. In this way, the ownership of said companies is distributed among their holders.

Generally, the social shares are treated as aliquots and identical parts. All of them imply the commitment of their owners or holders to assume the different rights and obligations in the company in question.

Among these rights, there are concepts such as the pledge or the usufruct. They are some of the most common advantages in the case of limited companies, sharing an economic nature never of decision or voting rights.

Alternatively, it is possible to accumulate a larger volume of shares, as there are different ways of transferring shares, being possible their transfer among the partners themselves preferably.

Main features of social shares

Compared to other forms of division of share capital such as shares, for example, shareholdings have some notable characteristics:

  • Structural element: The shares distributed among the partners are the elements that make up any limited liability company.
  • Nature of the shares: Each share is nominative, equal, cumulative and indivisible.
  • Objective: The very existence of a participation inherently supposes that its holder has a series of rights and duties with respect to his company.
  • Regulation: Usually, the powers granted by a participation are formally regulated by the statutes of the commercial company, as well as by the legislation of each territory.
  • Internal transfer: As indicated, the shares can be transferred through their purchase (inter vivos modality) or after death (called mortis causa modality) between the existing partners internally.
  • External transmission: In the event that it is intended to assign or transfer shares to an individual or external company, it must be the board of directors, or the rest of the partners in full, those who give agreement.
  • Formal communication: Every participatory transfer must be recorded in a legally valid document that communicates the details of the transfer.
  • Price: There is a price for each participation, adapted to its nature and dependent on the economic health of the society or its total value.

The aforementioned freedom to exchange shares is often less than in the case of shares. In addition, it is always subject to what the statutes of each company stipulate.

Also, contrary to what happens with shares, the shares cannot be incorporated into negotiable securities.

A prominent case of participation is that of privileged corporate participations. These are defined as those that suppose extraordinary rights to certain partners.

Through them, they statutorily acquire privileges or extra rights beyond economic motivation in the form of dividends. That is, they can win the right to decide and vote, as well as other preferential conditions.

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