Registered shares

Registered shares can be made out to natural persons or legal entities. They are transferred by means of a written agreement, or endorsement.

Because the name of the new shareholder is entered in the company's stock ledger, registered shares are not highly fungible. For the most part, however, this obstacle can be circumvented with an endorsement in blank. Special regulations pertaining to the transfer of registered shares can be laid down in the company's charter.

Recently, there has been a clear trend toward registered shares, which have certain advantages over bearer shares. For one thing, issuers of registered shares know who their shareholders are, and thus can expect their shareholder structure to be more stable. Secondly, because the stock ledger contains current data on shareholders, it enables the company to communicate directly and more effectively with its shareholders. Furthermore, a company with a transparent shareholder structure will have more opportunities to utilise secondary market instruments such as listings on other market segments, share buybacks, or capital increases. In short, the issuance of registered shares facilitates all measures aimed at enhancing investor relations – a convincing argument now that shareholder value is playing an increasingly important role in the capital markets.

Stock corporations that are planning a direct listing (listing of the original shares) on the New York Stock Exchange (NYSE) – the world's largest stock exchange – are required to issue registered shares.

A special type of registered share is a registered share with limited transferability.