Non-Voting and Partly Non-Voting Shares
Non-voting shares are shares which do not carry any voting rights. Partly non-voting shares only carry voting rights in relation to certain situations. As a general rule, all shares of a company carry equal rights. To implement exceptions to this rule by splitting the stock into share classes, the Articles of Association must set forth the differences between the share classes. The Companies Act does not limit the differences in voting rights between share classes. In addition, the Articles of Association may stipulate that certain share classes do not carry voting rights in certain matters, and that a share can be converted from one share class to another.
Unless otherwise stipulated in the Articles of Association, a non-voting or partly non-voting share:
carries all other shareholder rights except the voting right; and
carries voting rights when dividend or other non-restricted equity that, pursuant to the Articles of Association, shall be paid on the share regardless of a distribution decision, has not been paid within eight months of the end of the financial period.
In a matter, where a non-voting or partly non-voting share does not carry a vote, such share shall not be taken into account when calculating the majority required for a decision of the General Meeting.
A non-voting or partly non-voting share often carries superior financial entitlement compared to shares with full voting rights.