ArticlesIssue of Shares: Common, Registered and Intangible

In a previous article we dealt with shares, their fanctions and value. Also: with the rights and obligations deriving from the shareholding relationship.

At present, we will be concerned with their issuance. We will be concerned, in particular, with common, registered and intangible shares, the obligation (or not) to issue equity securities as well as their under/over par issues.


The Common Shares

The shares issued by an SA belong, according to the law (art. 37 law 4548/18), to the category of common shares – provided they do not fall into any other category (: preferred, redeemable and amortized – according to the Memorandum to the Law on the specific article).

The SA is required to have at least one common share (art. 37 §2). This is a provision that was first introduced by Law 4548/2018. Under the regime that prevailed, on the contrary, there were quantitative restrictions, concerning the issuance of preferred and redeemable shares (art. 4 Law 876/1979). These restrictions were, however, abolished with the entry into force of Law 4548/2018.

Common shares provide all the rights provided by law (art. 37 §3). With the exception, of course, of those that concern specific classes of shares. In any case, however, they provide the right to vote as well as the right to participate in the profits and the product of the liquidation of the company.


The Issue Price of the Shares

In our previous article we mentioned, among other things, the nominal value of the share (€0.04-€100). Its issue price, on the contrary, is, in principle, freely set by the SA. It is not permissible, however (art. 35 §2), to issue shares at a price lower than par (at a price, i.e., that falls short of their nominal value). This is reasonable, as, in the absence of the relevant provision, the entire share capital would not be paid.

It is possible, on the other hand, to issue shares at a price greater than their nominal value: their issue, i.e., at a premium (art. 35 §3). In some cases, in fact, the premium issue of shares is assessed as necessary. In some cases of increase, e.g., of the share capital, the shareholder is appropriate to pay consideration for the goodwill acquired by the SA. Moreover, in this way, the principle of equal treatment of shareholders is preserved.

The premium amounts constitute an element of the net position of the SA (art. 26 §1, par. a1 and examples Par. B΄). Although they are part of the “paid-in capital”, they should not, however, be confused with the share capital: they constitute supplementary capital, the existence of which establishes the obligation to pay capital accumulation tax (113/2009 Legal Council of the State, 1044/03.02.2014 Ministerial Decision).

The premium amounts cannot be allocated for the payment of dividends or percentages (art. 35 §3 Law 4548/2018). It is possible, however, for them (a) to be capitalized or (b) to be set off to offset losses of the SA, following a decision of the General Assembly (art. 35 §3).

The possibility of offsetting the premium with the amortization of losses is ancillary (Memorandum to the Law on 49§4 Law 4587/2018, which amended §3 of Article 35 Law 4548/2018). This means that the above amount can be used for the amortization of losses, as long as the SA does not have reserves or other funds that can, in the first place, be used for the above purpose.

In the case of partial payment of the share capital, as long as the issue of shares at a premium is foreseen, the difference is paid in full, once, upon payment of the first installment (art. 21 §3, para. b΄, sub. b΄).


Issuance of Shares: Registered Shares & Abolition of Shares

The SA is obliged to issue, exclusively, registered shares (art. 40 §1). The unregistered shares have already been abolished (from 1.1.2020).

The reasons for the abolition of unregistered shares are several (see Memorandum to the Law 4548/2018). To begin with: the abolition of unregistered shares is aimed at regulatory simplification, as now uniform rules apply to the shares of the SA; there is no longer any distinction between registered and unregistered shares.

After all, the specific distinction and the advantage of unregistered shares in terms of their easier transfer had already been relativized. With regard to listed shares, the same, uniform, provisions for the transfer of registered shares (the overwhelming majority at the time) and unregistered (about ten at the time of the law’s enactment) applied (and before the enactment of Law 4548/2018). Also, the national legal order contained rules of law, and in particular, rules of tax law, which required the drawing up of a document also for the transfer of unregistered shares.

Furthermore, the abolition of unregistered shares is the most effective measure and the simplest means of avoiding the risks that they entail precisely because of their anonymity. The institutions of the European Union, through their work, have, for a long time, asked the member states to ensure that unregistered shares will not be a means of abusive practices (e.g. money laundering).

It should be noted that Greece has incorporated into the national legal order Directive 2015/849/EU on the prevention of the use of the financial system for the laundering of proceeds from illegal activities or for the financing of terrorism, with Law 4557/2018. Further reference to this law is beyond the scope of this article. It is pointed out, however, that the parallel processing of the above-mentioned law and the new law on SAs played an important role in the choice of the simplest measure of the abolition of unregistered shares.

Obligation to Issue Equity Securities

The importance of stocks is significant on many levels. The term share means, among other things, the title in which the shareholding relationship is incorporated.

In particular, the SA is obliged to issue and deliver to the shareholders share certificates (art. 40 §3). In fact, under the current regime, only definitive and not temporary equity securities are issued. The Board of Directors is in charge of issuing and delivering the shares. The latter (BoD) acts within the limits of possible within the stricter limits set by the statute of the SA, if such are in place. Accordingly, a claim is made to the SA for the issuance and delivery of the shares in favor of the shareholders.

It is also expressly provided that equity securities may be single or multiple. Multiple equity securities incorporate more equity relationships and, correspondingly, more equity rights. This very fact, however, may make their marketability more difficult. However, the law expressly establishes the obligation of the SA to replace any existing multiple securities with new ones, which incorporate a smaller number of shares – provided there is a relevant application.

Issuance of shares performs a legitimizing role for the shareholders on the one hand and for the SA on the other. However, as we already pointed out in our previous article, their publication is merely declarative and not constitutive in nature. That is, it is a prior obligation of the establishment of the shareholding relationship.

The articles of association may exclude or limit the obligation of the SA to issue shares (art. 40 §4, section a’). In this case, the relevant statutory clause defines the method of proof of shareholder status (art. 40 §4, section b). In the event of its absence, the proof of shareholder status is then based on the details of the shareholders’ book. Additionally, if the shareholders’ book leaves doubt or has not been properly updated, based on documents held by the shareholder (art. 40 §4 in fine).


The Shareholders’ Book

Keeping the shareholders’ book constitutes an obligation of the SA in any case (art. 40 §2 section a’). The law, in fact, explicitly numbers the details of the shareholders that this book must include. These are: (a) their name or company name, (b) their address or registered office, (c) their profession, (d) their nationality, (e) the number of shares they own and (f) the category of these shares (art. 40 §2 sec. b’ and c’). Also, (g) the details of their (possible) transfer (art. 41 §2).

The law does not provide for a specific procedure for keeping the shareholders’ book. However, it provides the possibility, through a statutory provision, for it to be kept electronically. Alternatively: from the central securities depository, from a credit institution or from an investment service firm, which have the right to hold financial instruments. As long as there is no relevant statutory provision, the rule of it being kept in written is in place.

The shareholders’ book provides major facilities in terms of proof of one’s shareholder status. It carries the evidentiary power of commercial books (art. 444 no. 1 of the Code of Civil Procedure). In fact, its evidentiary importance is highlighted by the law itself: vis-à-vis the company, the person registered in the book in question is considered to be a shareholder (art. 40 par. 2 in fine). Clearly, however, its significance is intertwined with its proper updating, otherwise it has no evidential power.

Any non- (correct) updating by the SA of the shareholders’ book entails adverse legal consequences. First of all, this is a tax violation, which entails a fine. At the same time, not (correctly) complying with it may establish civil liability of the SA towards third parties. Possibly, also personal liability of the members of the Board of Directors, who are charged with its update (71 Civil Code).


Issuance of Shares: Intangible Shares

The case for non-issuance of shares should not be confused with the case of intangible shares. In the latter case there are shares, but these are shares that are issued and kept in an accounting form.

The obligation to dematerialize the shares had already become mandatory for SAs listed on a regulated market, with Law 2396/1996. On the basis of dematerialization, shares are not on paper. On the contrary, they are registered in an accounting form and are tracked in an electronic file, in a register of securities (e.g. in the Dematerialized Securities System, in the case of the Athens Stock Exchange). The purpose of this specific obligation is security and the reduction of transactional costs as well as the faster and simpler transfer of these shares.

The issuance of intangible shares is already possible for non-listed SAs.

The shares of SAs can be kept in accounting form, not only after dematerialization, but also after immobilization (for both cases: art. 40 §5 Law 4548/2018 and Regulation (EU) 909/2014). The term immobilization refers to the act of gathering material securities in a central securities depository, so that all the transfers that will follow can be carried out with an accounting entry. The SA’s articles of association must provide for the more specific method of issuing and maintaining its shares in a central securities depository, out of the above two.

In the case of shares that have been issued in accounting form, a shareholder vis-à-vis the company is considered (art. 40 §6) not only the person registered in the register of the central securities depository, but also the person identified as such through the registered intermediaries.


Shares are, as we have already pointed out, the most common and important securities of those issued by any SA. Of these, the more important and necessary: ​​the common shares. Other distinctions/declarations and provisions of the law (e.g. registered and intangible shares, obligation (or not) to issue equity securities as well as their under/over-par issue) make it easier to understand their operation, according to the law, and, of course, their optimal business utilization. Our next article is also about this.-

Stavros Koumentakis
Managing Partner


P.S. A brief version of this article has been published in MAKEDONIA Newspaper (June 26th, 2022).


Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

Stavros Koumentakis
Nikis Avenue & 1, Morgenthau st., 54622 Thessaloniki
(+30) 2310 27 80 84

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