Financial Assets: Shares, Types, and Rights

Financial Assets

A financial asset is any asset that is: cash, an equity instrument of another enterprise, or involves a contractual right to receive cash or another financial asset, or to exchange financial assets or liabilities with another party under potentially favorable conditions. They are also classified as a financial asset, any contract that may be or will be settled with equity instruments themselves, provided that:

• a) If it is derived, or may require the entity to accept a variable number of its own equity instruments.
• b) If it is derived, it cannot be, or will not be, settled by a fixed price for a fixed number of its own equity instruments.

Financial assets include obligations, bonds, notes, and other debt securities acquired; stocks, shares in collective investment schemes, and other equity instruments acquired; and derivatives (including futures and swaps).

Characteristics of Shares

All shares must be fully subscribed, i.e., someone must take responsibility for them, disbursed at the time of the subscription at least 25% of the nominal value and the entire premium. Shares can be:

• a) Nominative (see the name of the holder) or bearer (they belong to the possessor).
• b) Common or preferred, depending on whether they attribute the normal regime of rights and obligations of membership or if there is some other gain, always with existing limitations in the law.

Non-Voting Shares

The SA may issue shares without voting rights for a nominal amount not exceeding half the paid-up share capital. In return for this deprivation, the holders of those shares without voting rights enjoy other rights, such as:

• Right to a minimum annual dividend rate, fixed or variable, according to the statutes.

When the company cannot pay the annual dividend, these shares will have voting rights during this period, and unpaid dividends shall be accumulated from year to year. That is, these actions attribute to the holders the rights of common stock except voting. The exercise of preemptive rights will depend on the provisions of the articles of association.

Rights Resulting from Actions

The rights resulting from actions are:

1. Economic Rights:
   • The right to participate in the results of the company.
   • The Active Dividend, which is part of the benefit that is assigned to a share in a determined financial period.
   • Right to participate in the assets resulting from liquidation.
   • Preferential subscription rights for issuing new shares or bonds convertible into shares.
2. Political Rights:
   • Participation in the shareholders' meeting (voting and attendance rights).
   • Right to information.
   • Preemption rights.