Classes of shares in a simple joint-stock company: how to divide votes, profit and information between founders, investor and team on incorporation

The founders of a start-up usually want to keep control over the direction of the company, the investor wants its money back in priority and visibility of the figures, and the key people in the team want a share in the success without deciding on strategy. In an s.r.o., these interests are dealt with mainly through agreements between the shareholders. A simple joint-stock company (j. s. a.) can translate them directly into the shares, that is, into what the shareholder holds.

What the Act allows

The shares of a j. s. a. may be ordinary shares or shares with special rights. The Act states what those special rights may consist in, the list being illustrative:

The company may issue ordinary shares and shares with special rights. The special rights may consist in particular in determining a) the extent of the entitlement to a share in the profit or in the liquidation surplus otherwise than by the ratio of the nominal value of the shares to the nominal value of the shares of all shareholders; the extent of the entitlement may be determined in particular as fixed, preferential or subordinated, b) the number of a shareholder’s votes otherwise than by the ratio of the nominal value of the shares to the amount of the registered capital, c) the extent of the right to be provided with information about the company.

— Section 220i(3) of Act No. 513/1991 Coll. (unofficial English translation)

Different special rights may attach to shares of the same nominal value, and shares carrying the same rights form one class (Section 220i(4)). The nominal value may also be expressed in euro cents (Section 220i(2)), so the participation can be divided into very small parts. The difference from a joint-stock company is fundamental: there the Act prohibits the issue of classes of shares other than those it lays down itself (Section 155(6)), but for a j. s. a. that rule does not apply (Section 220h(4)).

What the division may look like in a start-up

The following division is illustrative; the actual arrangement always depends on the agreement with the founders and the investor:

• founder shares with a higher number of votes (point (b)), so that the founders keep a majority of the votes even after their share in the registered capital falls,
• investor shares with a preferential entitlement to the liquidation surplus or to profit (point (a)) and with an extended right to information, for example to regular reporting (point (c)),
• team shares without voting rights, conferring a share in the profit and in the liquidation surplus but no vote in decision-making at the general meeting; the way in which a j. s. a. sets aside shares for employees and collaborators is described in the article the ESOP built into the Act.

Shares with special rights must state their class, their number and a reference to the provision of the articles of association governing their rights (Section 220i(4)). The classes of shares are also reflected in the issue at the central securities depository and in the Commercial Register, where the number, class, form, type and nominal value of the shares are recorded (Section 13(f) of Act No. 29/2026 Coll.). The structure is therefore no secret; who holds how many shares is also apparent from the public register of shareholders.

Limits that are overlooked in the design

At least one share with a vote. Shares without voting rights may be issued only if voting rights attach to at least one of the company’s shares (Section 220i(5)). If the company has no shareholder with a voting share, or voting rights cannot be exercised in it, the court will dissolve it even of its own motion and order its liquidation (Section 220i(6)). The design must also allow for the situation where the founders holding voting shares depart.

The articles of association must describe the rights in full. Where the company issues more than one class of shares, the articles of association must state the designation of the classes, the content of the rights attaching to each class and the manner of their exercise (Section 220v(1)). Any restriction on the exercise of voting rights must apply equally to all shares of the same class (Section 220v(2)). The names of the classes of shares are already stated in the founding agreement (Section 220u(1)(c)).

Changing the rights later requires the consent of those affected. The rules on a joint-stock company apply as appropriate to a j. s. a. (Section 220h(3)), under which a resolution to change the rights attaching to a class of shares also requires the consent of a two-thirds majority of the votes of the shareholders holding those shares (Section 186(2)). Holders of shares without voting rights may also vote on it:

Where, under this Act, voting by class of shares is required on a particular matter at the general meeting, the holder of shares without voting rights is entitled to vote on that matter at the general meeting.

— Section 220i(7) of Act No. 513/1991 Coll. (unofficial English translation)

The rules on transferability are protected in a similar way: any change to them must be approved by a two-thirds majority of the votes of the holders of the shares concerned (Section 220k(2)). The rights attaching to the individual classes of shares are therefore worth setting up on incorporation, while the founders are the only shareholders.

Preferential profit without a vote calls for separate assessment. In a joint-stock company, holders of preference shares without voting rights acquire voting rights if the general meeting resolves that the preference dividend will not be paid, or if the company is in delay with its payment (Section 159(3)). Whether, and to what extent, that rule applies as appropriate to shares in a j. s. a. carrying a preferential share in the profit without a vote has to be assessed when designing the structure, because the Act does not address it expressly for a j. s. a.

The procedure on incorporation

The classes of shares are best designed from the end: first go through what each group is to receive on a sale of the company, on liquidation and on a distribution of profit, and only then draft the articles of association. Next comes the founding agreement with the articles of association, the shareholders’ agreement with the rules on transfers and, after registration, the issue of the shares at the central securities depository. From 17 August 2026, the founding agreement may also be drawn up and authorised by an advocate, as explained in the question incorporating a j. s. a.: notary or advocate.

The design of the classes of shares forms part of the service incorporating a simple joint-stock company. If you are still considering the legal form and dealing with the company’s entire legal foundation, see the legal package for start-ups; the entry of an investor into an existing company is addressed by the service investor entry.