Equity

Scrip Shares Temporary certificates issued to shareholders entitling them to new shares once allotment is formally registered; used in acquisitions and capital raises.

Seasoned Equity Offering A public sale of shares by a company that is already listed on a stock exchange, used to raise capital from new and existing investors.

SEC Reporting Requirements for ADR Issuers SEC reporting requirements for ADR issuers range from minimal Form F-20 exemption to full Form 20-F annual filings and periodic updates, depending on tier and float.

Secondary offering A secondary offering is an offering of shares by existing shareholders (not the company) into the public market, raising money for the shareholders but not for the company.

Secondary Sale A transaction in which employees of a private company sell their existing shares or equity to new investors at a set price, providing partial liquidity before an IPO or acquisition.

Section 83(b) Election Tax election to recognize income at the grant date of restricted stock rather than at the vesting date, locking in the lower valuation for tax purposes.

Section 83(b) Election: Deadline and Filing Process The strict 30-day window and step-by-step filing process for a Section 83(b) election to accelerate tax recognition of restricted shares.

Selective Buyback A share repurchase from a named shareholder or limited group, rather than on-market or proportionally from all holders.

Senior Preferred Stock The highest-ranking class of preferred shares, with first claim on dividends and assets in liquidation before junior preferred or common stock.

Series A vs Series B Preferred Stock Differences Series A vs Series B preferred stock terms diverge on liquidation multiples, anti-dilution protection, board control, and investor rights as companies mature and risk decreases.

Series Seed Preferred A simplified preferred share class used in early-stage startup financings before a full Series A round.

Shadow Equity Plan A notional ownership scheme for private-company employees that mirrors equity economics without conferring legal ownership.

Share buyback A share buyback is a corporate action in which a company repurchases its own outstanding shares from the market, reducing share count and returning cash to shareholders.

Share Buyback vs Dividend: How Companies Return Cash to Shareholders How share buybacks and dividends differ in mechanics, tax consequences, and long-term shareholder impact.

Share Capital The aggregate par value of issued shares, representing the nominal contribution by shareholders at incorporation or capital raising.

Share class A share class is a distinct category of stock issued by the same company, usually differing in voting rights, dividend priority, conversion terms, or transferability.

Share Class A vs B vs C: Differences for Investors How share classes differ: voting rights, conversion features, liquidity, and economic rights for common multi-class structures.

Share Class Reclassification Conversion of one class of shares into another, altering the economic terms, voting rights, or priority status of existing shareholders.

Share Class Structures in Family-Controlled Companies How family businesses use multi-class share structures to retain voting control while accepting outside capital, preserving founder vision across generations.

Share Consolidation A corporate action in which a company reduces the number of its outstanding shares by combining multiple shares into one, increasing the price per share.

Share Consolidation vs Stock Split Share consolidation vs stock split: how opposite corporate actions change share count and per-share prices while keeping total market value intact.

Share Dilution The reduction in ownership percentage and earnings per share when a company issues new shares to existing shareholders.

Share Issuance The process by which a corporation creates and distributes new shares to investors, employees, or the public, increasing the total shares outstanding.

Share Premium Account A UK and IFRS-standard equity reserve showing amounts paid above par value at share issuance, with legal restrictions on distribution.

Share Register The official ledger maintained by a company or its transfer agent listing all current shareholders, their holdings, and transfer dates.

Share Repurchase Program An authorization by a company's board to buy back its own stock over time, reducing the share count and returning capital to shareholders without issuing a dividend.

Share Warrants Derivative instruments granting the holder the right to purchase shares of a company at a fixed exercise price on or before a maturity date.

Shareholder Class Action Lawsuit: How It Works Securities class actions move from filing through lead-plaintiff appointment, settlement, and claims process—here's what ordinary shareholders receive.

Shareholder Derivative Suit Litigation filed by shareholders on behalf of the corporation to recover damages for breach of fiduciary duty by directors or officers.

Shareholder Oppression Remedies in a Private Company Minority shareholders in private companies can seek legal remedies when majority owners oppress them. Courts can order buyouts, dissolution, or other relief.

Shareholder Proposal Motion submitted by shareholders to be voted on at the annual meeting, often on governance or social issues.

Shareholder Ratification Votes: What They Actually Mean Understand what shareholder ratification votes actually mean: when they're binding, when they're advisory, and what happens if voters reject them.

Shareholder Rights Plan (Poison Pill) Explained How a shareholder rights plan (poison pill) works mechanically—the trigger threshold, flip-in provision, and dilution of a hostile acquirer.

Shareholders Equity The residual claim on a company's assets after all liabilities are paid, representing the net worth attributable to owners as recorded on the balance sheet.

Shares of Stock The fundamental unit of equity ownership in a corporation, representing a fractional ownership claim on the company's assets and earnings.

Shelf Registration Offering A shelf registration offering lets companies pre-authorize future share sales with the SEC, giving them flexibility to issue securities quickly when market conditions align.

Short Selling Depositary Receipts The mechanics and constraints of borrowing and short-selling ADRs and GDRs versus the underlying ordinary shares.

Simple Agreement for Future Equity A convertible instrument that grants rights to future equity on a priced round without interest or maturity date.

Single-Trigger Acceleration Vesting acceleration that occurs automatically upon a change of control, with no employment termination required.

SPAC Founder Shares and the Promote Structure SPAC founder shares and the promote: how sponsors acquire Class B shares at a discount and dilute public shareholders on deal completion.

SPAC IPO The initial blank-cheque public offering that capitalises a SPAC and grants it capital to acquire an operating company.

SPAC Redemption Rights: How Shareholders Can Exit Before a Deal Closes SPAC redemption rights explained: shareholders can redeem shares at trust value before merger closes, reducing deal certainty and shifting risk to remaining shareholders.

SPAC vs Traditional IPO: Key Differences for Companies Going Public SPAC vs traditional IPO comparison: mechanics, timeline, costs, and disclosure requirements differ significantly in how companies reach public markets.

Special Dividend Tax Treatment for Shareholders Special dividends are typically taxed as qualified dividends if they meet holding periods, but return-of-capital distributions may defer taxation. Learn the rules.

Special Dividend vs Regular Dividend Special dividend vs regular dividend: ordinary dividends recur quarterly, while special dividends are one-time payments from excess cash or asset sales.

Special Meeting Rights The shareholder power to convene extraordinary meetings outside the annual cycle to force a vote on urgent or activist-driven matters.

Special-Purpose Acquisition Company A public shell company that raises capital in an IPO with the sole purpose of merging with a private operating company to take it public.

Spin-off A corporate action where a parent company distributes shares of a subsidiary to shareholders, creating an independent publicly traded company.

Spin-Off Shares: Tax Treatment for Shareholders Spin-off shares distributed in a tax-free corporate spin-off are generally not taxed at distribution, but cost basis is allocated and future sales trigger capital gains tax.

Spin-Off Tax Treatment for Shareholders Under Section 355, a spin-off can be tax-free if the parent distributes subsidiary shares. We explain how cost basis splits between parent and spun-off stock, and when spin-offs trigger tax.

Spin-Off Transaction A corporate transaction in which a parent distributes subsidiary shares to existing shareholders, creating an independent public company.

Split-Off Transaction A corporate restructuring where shareholders trade their parent company shares for shares of a subsidiary being spun off.

Sponsored ADR A sponsored ADR is an American depositary receipt that is initiated and controlled by the underlying foreign company, which is responsible for regulatory compliance and investor relations.

Sponsored vs Unsponsored ADR: Key Differences for Investors Sponsored ADRs offer better disclosure, voting rights, and corporate action support, while unsponsored ADRs are cheaper to issue and trade but lack issuer oversight.

Squeeze-Out A compulsory acquisition mechanism allowing a majority shareholder to force minority shareholders to sell their shares once a control threshold is crossed.

Squeeze-Out Mergers and Minority Shareholder Protections Squeeze-out mergers use a majority shareholder or controlling group to force remaining minority shareholders out for cash. Courts apply fairness standards and offer appraisal rights.

Stabilisation Trading Post-IPO open-market purchases by underwriters that smooth short-term share price fluctuations and anchor the aftermarket.

Staggered Board Effect on Shareholder Control How a staggered board limits shareholder voting power by preventing activists from replacing directors all at once, slowing control changes.

Standby Underwriting An arrangement where underwriters guarantee to purchase any unexercised rights in a rights offering, ensuring full capital recovery for the issuer.

Standby Underwriting in a Rights Offering A standby underwriter agrees to buy any shares unsubscribed in a rights offering, guaranteeing the company will raise its target capital while protecting existing shareholders from dilution.