Term · Governance & Shareholder Structure
Dual-Class Shares
In briefDual-class shares are a share structure with different voting rights per class, in which one class may carry more votes at the same or a lower capital stake. For high-growth small companies this secures control but can weaken minority shareholders.
Definition
A share structure with different voting rights per share class. One class may carry higher voting rights at the same or a lower capital stake.
How it is calculated
Formula. Voting leverage = voting-rights share ÷ capital share.
Why it matters for small caps
For high-growth small companies, dual-class structures can secure control but weaken minority shareholders.
Common misreadings
- It is seen as mere founder-friendliness; for outside shareholders, the control discount is what matters.
In the process
Frequently asked
What are dual-class shares?
It is a structure with several share classes of differing voting power. One class holds more voting rights than another.
How do you measure voting leverage?
You relate the voting-rights share to the capital share. A value above one means disproportionate control.
Why are dual-class shares critical for outside shareholders?
They are often seen as mere founder-friendliness, but the control discount is what matters. Minority shareholders have less influence than their capital stake would suggest.
Related terms
Sources
Primary
Regierungskommission – Deutscher Corporate Governance Kodex
https://www.dcgk.de/de/kodex.html
https://www.dcgk.de/de/kodex.html
Methodology
Bundesministerium der Justiz – Aktiengesetz (AktG)
https://www.gesetze-im-internet.de/aktg/
https://www.gesetze-im-internet.de/aktg/
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.