Glossary for ownership and the shareholder ledger

Acquisition

An acquisition means a company or person buys shares or a whole company.

Annual general meeting

An annual general meeting is the ordinary general meeting that a limited company holds once a year.

Annual report

An annual report is a compilation of a limited company's accounts for a financial year.

Articles of association

The articles of association are the basic rulebook that governs how a limited company operates.

A-share

An A-share is a share class that usually carries more votes per share than the company's other shares.

Asset deal

An asset deal means the company's business is sold, rather than the shares in the company being sold.

Associated company

An associated company is one in which another company has significant but not controlling influence.

Authorized person (share ledger)

An authorized person is someone entitled to enter or change information in the share ledger for the company.

Average acquisition cost (GAV)

Average acquisition cost (GAV) is the average price you have paid for your shares.

Average cost method

The average cost method is a way to calculate the cost basis for shares or options of the same class and type.

Back-loaded vesting

Back-loaded vesting is a vesting model where a smaller portion vests early and a larger portion at the end.

Beneficial owner

A beneficial owner is the natural person who ultimately owns or controls a company.

Blank transfer

A blank transfer means a document of value is transferred by endorsement without naming the recipient.

Block of shares

A block of shares is a consecutive series of share numbers held by the same owner with the same history.

Board member

A board member is a person who sits on a limited company's board of directors.

Board of directors

The board of directors is the body elected by the general meeting to manage the company.

Board's responsibility for the share ledger

The board's responsibility for the share ledger means ensuring it is kept, retained and made available.

Bond with warrants

A bond with warrants is a loan where the debt instrument carries warrants to subscribe for new shares.

Bonus issue

A bonus issue raises share capital using the company's own funds, without new capital being added.

Bonus share

A bonus share is a new share issued in a bonus issue, without the shareholders paying anything for it.

Bonus share right

A bonus share right is an existing shareholder's right to receive new shares in a bonus issue in the company.

Book value per share

Book value per share is a limited company's equity divided by the number of outstanding shares.

Broker

A broker is a person or firm that buys and sells securities on behalf of someone else.

B-share

A B-share is a share class that usually carries lower voting power than the company's A-shares, often a tenth.

Business angel

A business angel is a private individual who invests their own capital in a company at an early stage.

Business transfer

A business transfer means that a company changes owner, through a sale of the shares or of the business.

Debenture issue

A debenture issue means a company borrows money by issuing bonds or debentures to investors.

Delivery of share certificate (pledge)

Delivery of a share certificate means handing a pledged certificate to the pledgee to protect the pledge.

Demerger

A demerger means a limited company's assets and liabilities are transferred to one or more other companies.

Demerger consideration

Demerger consideration is the compensation that shareholders in a company being divided receive in a demerger.

Demerger plan

A demerger plan is the plan the board of directors draws up ahead of a demerger of a limited company.

Deputy board member

A deputy board member is a substitute who can step in for an ordinary board member.

Digital share ledger

A digital share ledger is a share ledger kept digitally instead of in Excel or on paper.

Dilution

Dilution means existing owners' stake in the company decreases when new shares are issued.

Directed share issue

A directed share issue is a new share issue offered to selected investors instead of all owners.

Direct investment

A direct investment is an investment that gives significant or controlling ownership influence in a company.

Dividend

A dividend is when a limited company distributes part of its profit to its shareholders.

Dividend coupon

A dividend coupon is part of a share certificate that was historically handed in to collect a dividend.

Dividend proposal

A dividend proposal is the board's proposal to the general meeting on how large a dividend to pay.

Due diligence

Due diligence is a review of a company carried out ahead of an investment or acquisition.

Employee stock option

An employee stock option gives an employee the right to buy shares in the company in the future.

Employee stock option benefit

An employee stock option benefit is the taxable benefit that may arise when an employee exercises an option.

Entry date

The entry date is the date on which an event is recorded in the share ledger.

Equity

Equity is the difference between a company's assets and its liabilities.

Equity account

An equity account brings an investor's holdings in unlisted companies into a single overview.

Equity option

An equity option is an option whose underlying asset is a share, either as a call or a put option.

Establishing the share ledger

Establishing the share ledger means creating it, which must happen once the memorandum is signed.

Estate inventory

An estate inventory is a record of a deceased person's assets and debts at the time of death.

Estate of a deceased person

An estate of a deceased person is the assets and liabilities left by someone who has died.

Exchange of share certificates

An exchange of share certificates means old certificates are replaced with new ones, often after changes.

Ex-dividend date

The ex-dividend date is the day a share starts trading without the right to an upcoming dividend.

Extended close-company definition

The extended close-company definition means more companies can count as close companies under Swedish tax law.

Extraordinary general meeting

An extraordinary general meeting is a general meeting held in addition to the AGM when a decision is needed.

Failure to keep a share ledger

Failure to keep a share ledger means a company does not keep its share ledger or make it available.

Financial instruments

Financial instruments is a collective term for, among other things, shares, bonds, fund units and derivatives.

Flagging of major holdings

Flagging means a holding in a listed company must be disclosed when certain thresholds are crossed.

Form K13

Form K13 is an attachment to the tax return used for certain share exchanges involving qualified shares.

Form KU31

Form KU31 is a statement of earnings to Skatteverket on dividends and similar on shares and equity rights.

Form KU32

Form KU32 is an information return to Skatteverket on disposals of shares and similar rights and of claims.

Form of the share ledger

The form of the share ledger refers to how it may be kept: digitally, in a bound book or loose-leaf.

Founder

A founder is the person or company that forms a limited company.

Failure to keep a share ledger

Failure to keep a share ledger means a company does not keep its share ledger or make it available.

Financial instruments

Financial instruments is a collective term for, among other things, shares, bonds, fund units and derivatives.

Flagging of major holdings

Flagging means a holding in a listed company must be disclosed when certain thresholds are crossed.

Form K13

Form K13 is an attachment to the tax return used for certain share exchanges involving qualified shares.

Form KU31

Form KU31 is a statement of earnings to Skatteverket on dividends and similar on shares and equity rights.

Form KU32

Form KU32 is an information return to Skatteverket on disposals of shares and similar rights and of claims.

Form of the share ledger

The form of the share ledger refers to how it may be kept: digitally, in a bound book or loose-leaf.

Founder

A founder is the person or company that forms a limited company.

Failure to keep a share ledger

Failure to keep a share ledger means a company does not keep its share ledger or make it available.

Financial instruments

Financial instruments is a collective term for, among other things, shares, bonds, fund units and derivatives.

Flagging of major holdings

Flagging means a holding in a listed company must be disclosed when certain thresholds are crossed.

Form K13

Form K13 is an attachment to the tax return used for certain share exchanges involving qualified shares.

Form KU31

Form KU31 is a statement of earnings to Skatteverket on dividends and similar on shares and equity rights.

Form KU32

Form KU32 is an information return to Skatteverket on disposals of shares and similar rights and of claims.

Form of the share ledger

The form of the share ledger refers to how it may be kept: digitally, in a bound book or loose-leaf.

Founder

A founder is the person or company that forms a limited company.

Incentive program

An incentive program gives employees or key people remuneration linked to how the company develops.

Interim certificate

An interim certificate is temporary proof that newly subscribed shares are paid but not yet registered.

Investment agreement

An investment agreement governs the terms when an investor puts capital into a company.

Issuance of share certificates

Issuance of share certificates means the company hands over a share certificate to the shareholder concerned.

Issue authorization

An issue authorization lets the board resolve on a share issue within limits set by the general meeting.

Issue certificate

An issue certificate is proof of the right to receive new securities in a share issue, such as new shares.

Issuer

An issuer is the company or organization that issues shares or other securities to investors.

Issue resolution

An issue resolution is the decision to issue new shares or other securities.

Know Your Customer (KYC)

Know Your Customer (KYC) means verifying and knowing who a customer or owner really is.

Leading representative (close company)

A leading representative of a close company is a person who has significant influence over the company.

Legal entity

A legal entity is an organisation that can have its own rights and obligations, such as a limited company.

Letter of intent (LOI)

A letter of intent (LOI) is a document in which the parties state that they intend to complete a deal.

Limited company

A limited company is a business form that is its own legal entity and is owned through shares.

Limited liability

Limited liability means that the owners of a company are generally not personally liable for its debts.

Linear vesting

Linear vesting is a vesting model where equal portions vest at regular intervals over a set period.

Liquidation

Liquidation means a limited company is wound up and dissolved.

Listed company

A listed company is a public limited company whose shares are admitted to trading on a regulated market.

List of voters

A list of voters is a record of who is entitled to vote at a general meeting.

Locking of a block of shares

Locking of a block of shares means a pledged block of shares is blocked so it cannot be transferred.

Majority shareholding

A majority shareholding means one or more owners together hold more than half of the shares or votes.

Mandatory rules (ABL)

Mandatory rules are provisions of the Swedish Companies Act that cannot be contracted out of or changed.

Market-based valuation

A market-based valuation means a company is valued by comparison with similar companies or transactions.

Memorandum of association

A memorandum of association is the document drawn up when a limited company is formed.

Merger

A merger means two or more companies combine into one.

Milestone-based vesting

Milestone-based vesting means rights are earned when the company or the individual reaches set goals.

Minority shareholder

A minority shareholder is a shareholder who does not have a controlling interest in a limited company.

Natural person

A natural person is an individual human being, as opposed to a legal entity such as a company.

Net asset value

Net asset value is the value of a company's assets minus its liabilities.

New share issue

A new share issue is when a limited company issues new shares for payment to increase its capital.

Nominal value

Nominal value was the fixed value a share previously had, now replaced by quota value.

Non-cash consideration

Non-cash consideration is property other than money that is used as payment for shares in a limited company.

Non-cash issue

A non-cash issue is a share issue in which the new shares are paid for with property instead of cash.

Non-CSD company (kupongbolag)

A non-CSD company (kupongbolag) is a limited company not registered with a CSD, like most Swedish companies.

Non-mandatory rules (ABL)

Non-mandatory rules are provisions of the Swedish Companies Act that a company may depart from.

Notation in the share ledger

A notation in the share ledger records a circumstance relating to a share or its owner.

Notation on a share certificate

A notation on a share certificate means an event affecting the shares is recorded on the certificate itself.

Notice of pledge (denuntiation)

A notice of pledge (denuntiation) is a notice that gives the pledgee protection against third parties.

NVR

NVR, Nordiska Värdepappersregistret, is a digital share ledger service for Swedish limited companies.

Offering restriction (private companies)

The offering restriction means private limited companies may not offer their securities to the general public.

Option

An option gives the holder the right, but not the obligation, to buy or sell an asset at a set price.

Option exercise

Option exercise means the option holder uses their right to buy or sell the underlying asset.

Option holder

An option holder is the person who holds an option and thereby the right to buy or subscribe for shares.

Out-of-the-money option

An out-of-the-money option is an option with no intrinsic value, as its strike price is unfavourable.

Outside-owner rule (3:12)

The outside-owner rule means close-company shares may be non-qualified if outsiders own a significant part.

Offering restriction (private companies)

The offering restriction means private limited companies may not offer their securities to the general public.

Option

An option gives the holder the right, but not the obligation, to buy or sell an asset at a set price.

Option exercise

Option exercise means the option holder uses their right to buy or sell the underlying asset.

Option holder

An option holder is the person who holds an option and thereby the right to buy or subscribe for shares.

Out-of-the-money option

An out-of-the-money option is an option with no intrinsic value, as its strike price is unfavourable.

Outside-owner rule (3:12)

The outside-owner rule means close-company shares may be non-qualified if outsiders own a significant part.

Parent company

A parent company is a company that owns and controls one or more subsidiaries.

PEP (politically exposed person)

A PEP, politically exposed person, is someone who holds or has held an important public function.

Pledge of shares

A pledge of shares means shares are provided as security for a debt, often a loan.

Possession

Possession means someone actually holds and can dispose of an item, whether or not they have a right to it.

Pre-emption clause

A pre-emption clause gives existing shareholders the right to buy back shares that have passed to a new owner.

Pre-emptive right

A pre-emptive right means existing shareholders may subscribe for new shares in proportion to their holding.

Preference shares

Preference shares are a share class that gives priority to dividends over other shares.

Primary market

A primary market is the market where new securities are sold for the first time, directly from the issuer.

Principle of equal treatment

The principle of equal treatment means all shares carry equal rights unless the articles state otherwise.

Private limited company

A private limited company is a company whose shares may not be offered to the public.

Public access to the share ledger

Public access to the share ledger means the share ledger must be available to anyone who wants to see it.

Public limited company

A public limited company may offer its shares to the public and can be listed on an exchange.

Purchase right

A purchase right entitles a company's shareholders to buy existing shares in another company.

Reclassification of shares

Reclassification means shares change share class, for example from A to B shares.

Reconstructed share ledger history

Reconstructed share ledger history means past ownership changes are rebuilt to obtain a correct share ledger.

Record date

A record date is the date that determines which shareholders are entitled to, for example, a dividend.

Redemption amount

The redemption amount is the compensation paid to a shareholder when their shares are redeemed.

Redemption clause

A redemption clause is a provision in the articles of association that allows shares to be redeemed.

Redemption date

A redemption date is the day on which a security, such as a share, is redeemed by the company or issuer.

Redemption of shares

Redemption of shares means the company redeems and repays certain shares to the owner.

Reduction of share capital

A reduction of share capital means a limited company lowers its registered share capital.

Register of ApS owners (Denmark)

A register of ApS owners is the Danish equivalent of an ownership register for a Danish ApS.

Registration in the share ledger

Registration in the share ledger means a new owner or change is recorded and dated in the ledger.

Restricted stock unit (RSU)

A restricted stock unit (RSU) is a right to receive shares or cash once certain conditions have been met.

Retention of the share ledger

Retention of the share ledger means keeping it while the company exists and for at least ten years after.

Reverse share split

A reverse split merges several shares into fewer, with a higher value per share.

Right of first refusal clause

A right of first refusal clause gives named persons the right to buy shares before they pass to a new owner.

Rights issue

A rights issue is a new share issue in which existing owners have priority to subscribe for new shares.

Secondary market

A secondary market is the market where securities already issued are bought and sold between investors.

Securities account (VP account)

A securities account (VP account) is an account with Euroclear Sweden for shares in CSD-registered companies.

Security

A security is a document or right that gives its holder value, usually one that can be converted into money.

Set-off issue

A set-off issue is a new share issue where new shares are paid for by setting off a claim against the company.

Settlement note

A settlement note is a receipt confirming the terms of a purchase or sale of shares.

Share

A share is a unit of ownership in a limited company that gives the right to vote and to receive dividends.

Share award

A share award means a person, often an employee, receives shares as a reward or as compensation.

Share buyback

A share buyback means a company buys back shares that it has itself issued.

Share capital

Share capital is the capital the shareholders contribute to a company in exchange for shares.

Share certificate

A share certificate is written proof that a person owns certain shares in a limited company.

Share class

Share class refers to different types of shares in a company, e.g. A and B shares, with different rights.

Share exchange

A share exchange means shares in one company are exchanged for shares in another company instead of cash.

Shareholder

A shareholder is a person or company that owns one or more shares in a limited company.

Shareholder contribution

A shareholder contribution is capital an owner injects into the company without receiving new shares.

Shareholder register

A shareholder register is a record of all the shareholders in a company and their holdings.

Shareholders' agreement

A shareholders' agreement is an agreement between shareholders governing how they should act in the company.

Share issue

A share issue is when a limited company issues new securities, usually shares, to raise capital.

Share ledger

A share ledger is a record of a company's shares and who its shareholders are.

Share ledger events

Share ledger events are the changes to ownership and shares that are recorded in the share ledger.

Share ledger extract

A share ledger extract is a document showing the share ledger at a specific point in time.

Share lending

Share lending means a shareholder lends shares on condition that the same number is returned later.

Share number

A share number is the sequential number that each individual share in a company has.

Share purchase agreement (SPA)

A share purchase agreement (SPA) is the agreement that sets out the terms when shares in a company are sold.

Share split

A share split means each share is divided into several shares, without changing the total value.

Silent partner

A silent partner is an owner who contributes capital but does not take an active part in running the business.

Spin-off

A spin-off means that part of a company, often a subsidiary, becomes an independent company of its own.

Stock market listing

A stock market listing means a company's shares become available for trading on an exchange.

Stock option program

A stock option program gives, for example, employees the right to buy shares in the future.

Strike price

A strike price is the predetermined price per share at which an option entitles the holder to trade.

Subscription list

A subscription list is the document where subscribers state how many shares they subscribe for in an issue.

Subscription price

The subscription price is the price per share to be paid for new shares in a new share issue.

Subscription right

A subscription right is the right to subscribe for new shares in a rights issue.

Subsidiary

A subsidiary is a company controlled by another company, the parent company.

The Swedish Companies Act (ABL)

The Swedish Companies Act (ABL) is the law that governs how limited companies are formed and run.

The Swedish Companies Registration Office (Bolagsverket)

Bolagsverket is the Swedish authority that registers companies and company information.

Third-party protection (perfection)

Third-party protection means that a right to property, such as shares, also applies against third parties.

Threshold amount (K10)

The threshold amount sets how much dividend or gain in a close company is taxed as capital income.

Trade date

A trade date is the day on which a deal in shares or other securities is agreed between buyer and seller.

Trading in unlisted shares

Trading in unlisted shares means buying and selling shares in companies that are not listed on an exchange.

Transfer of shares

A transfer of shares means shares change owner, for example through a sale, gift or inheritance.

Transfer restriction

A transfer restriction is a condition in the articles of association that limits how shares may be transferred.

Unlisted shares

Unlisted shares are shares in companies that are not listed on a stock exchange or trading venue.

Unrestricted equity

Unrestricted equity is the part of equity that may be distributed to shareholders.

Valuation

A valuation is an estimate of what a company or a shareholding is worth.

Venture capital

Venture capital is capital invested in high-risk, high-growth companies, often unlisted and early-stage.

Vesting

Vesting is the period or conditions that must be met before someone gains full rights to shares or options.

Voiding of share certificates

Voiding of share certificates means a certificate is made invalid, for example when replaced by a new one.

Voting power

Voting power is how many votes a share gives at the general meeting.

Voting rights

Voting rights are a shareholder's right to vote at the general meeting, often depending on share class.

Warrant

A warrant gives the right to subscribe for new shares in a company at a set price.