Module 1 · Chapter 2

Shares, Classes and the Register

The face value printed on a share is not what its owner paid. The register shows the real price, the classes that carry the rights, and the count behind every percentage.

≈ 8 min read 8-question test

In this chapter

  • What each owner paid for its shares, and why the face value misleads
  • Why three classes of share pay one dividend but carry different rights
  • How the manager's shares are paid for with work, and how the deal protects the others

2.1The register in one paragraph

At completion Thornbury issued 100,000 shares in three classes. Ferris holds the A shares, A&W the B shares and Dr Sayer the C shares. Every share has a face value of £1. Ferris and A&W paid £100 a share, but Dr Sayer paid only the face value.

All three classes get the same dividend per share and one vote per share. They differ only in the rights the agreement hangs on each class.

Key point

On the money side, every share in Thornbury is the same share. The classes exist to carry board seats, vetoes and vesting. Read the register for three things: the price, the class and the count.

Also in this chapter

  1. A share's face value is not its price
  2. Paying for shares with property
  3. Why three classes that pay the same dividend
  4. Where the classes differ
  5. Sweat equity: shares paid for with work
  6. One count for every percentage
  7. Your job

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