Understanding Company Shares, Shareholders, and Society Types
The capital is divided into shares. Shares may be transmitted freely once the company is entered in the commercial register. Contributions may be in goods or money and are taxed on income.
The Organs of the Society
- General Meeting of Shareholders: This meeting of members decides on important business issues.
- Ordinary General Meeting: This meeting occurs within the first six months of each year to review management, approve the accounts for the previous year, and decide on the application of the result.
- Extraordinary General Meeting: This meeting does not fulfill all the requirements of the ordinary meeting.
- Universal Joint Meeting: This board is understood and validly convened to discuss any matters, provided that the entire share capital and attendees accept its celebration.
Shareholders’ Rights
Shareholders have the following rights:
- Right to participate in the distribution of social benefits.
- Preferential subscription rights in the issuing of new shares.
- Right to attend and vote.
- Right to challenge social arrangements.
- Right to information on matters to be discussed at the shareholders’ meeting.
Types of Shares
Shares can be categorized as follows:
- According to Rights:
- Ordinary: These shares have no special rights.
- Privileged: These shares have some privileges, such as receiving a minimum dividend.
- According to Ownership:
- Nominative: The share incorporates the name of the owner.
- Bearer: The share belongs to the possessor.
- According to Capital:
- Ordinary: Those paid by currency.
- Own: Those in which, in return for payment, a contribution in kind is accepted.
- Released: The share is issued against reserves.
Basic Concepts Relating to Shares
- Nominal Value: The value of each share, as stated on the share certificate.
- Cash Value: The market value at the time of sale of a share.
- Theoretical Value: The value of a share based on objective criteria.
- Subscription Right: The preferential right of shareholders to subscribe to new shares to maintain the same proportion of the company’s capital that they possessed before the extension.
- Profitability: The ability of capital to produce an income, i.e., the relationship between livestock and invested capital over a period of time.
Labor Society
A labor society is a corporation or limited company in which at least 51% of the capital is owned by the company’s workers. Key features include:
- No member may hold shares representing more than a third of the capital.
- The liability of the partners is limited to the contributed capital.
- Social capital is divided into shares or equity.
- These companies can hire workers who are not partners.
- The business name shall consist of any company name followed by “anonymous work”.
- For the transmission of shares, preference will be given to permanent workers who are not members.
Society of Social Interest
This type of society does not seek profit but aims to satisfy the common needs of its members.
Cooperative Society
Cooperative societies are formed by natural or legal persons with common interests and needs, developing a particular business activity with a democratic structure and functioning. The economic results are attributed to members once the community funds are served, as a function of the cooperative activity they perform.
In Caracas, first-degree cooperatives can be composed of a minimum of 3 partners, and second-degree cooperatives are comprised of 2 cooperative partners. Liability for the debts of the cooperative is limited to the nominal amount of their social contributions. The minimum registered capital for each cooperative is set in the statute and varies according to the number of members. It is divided into shares of the partners that must be subscribed. The name will include the expression “cooperative”. 30% of the surplus should be allocated to the required reserve fund.