What are the disadvantages of participation certificates for the company and for the participant?

In principle, participation certificates are categorised as equity, i.e. there are other owners in addition to the shares. The shareholder’s percentage share in the company therefore decreases. The disadvantage for the participant is that participation certificates are often traded at a lower price than shares with voting rights. The difference can be significantly greater with unlisted/listed companies in particular, as the voting rights are worth considerably more.

All FAQs Published at: 2024-02-05