Ordinary Shares: The UK and European Standard

In a UK limited company, ordinary shares are the default class, carrying one vote per share, equal rights to dividends, and equal rights to a share of assets on winding up, unless the articles say otherwise. Companies often create multiple classes of ordinary shares (A, B, C ordinary) to give different rights to different holders, such as non-voting ordinary shares for some employees, a distinction that maps closely onto common shares terminology used elsewhere.

A German GmbH (the most common startup legal form) issues Geschäftsanteile, which are shares in a private limited company but are transferred by notarised deed, making transfers slower and more formal than in a UK company. A German AG (public limited company, more common for later-stage or IPO-track companies) issues Stückaktien, no-par-value shares that can be transferred more like listed company shares, which matters for companies planning to move toward structures such as growth shares later.

The notarisation requirement for GmbH share transfers is a distinctive German feature. It adds cost and time to every share transfer, including employee share transactions, which is one reason German startups often prefer virtual instruments like phantom shares for employees instead of real GmbH shares.

A Dutch B.V. (besloten vennootschap) can issue multiple classes of ordinary shares (gewone aandelen), often labelled A, B, C shares, each potentially carrying different voting or profit rights. Since 2012, Dutch law allows flexible share structures, including shares with no voting rights or no profit rights, which is commonly used to give employees economic exposure without governance control.

French startups, usually structured as an SAS (société par actions simplifiée), issue actions ordinaires with flexible rights set out in the company's bylaws (statuts). The SAS structure gives founders significant freedom to design share rights and governance compared to more rigid company forms.