Differences between a share and a stake

Shares and stakes are very similar. Both are ownership shares of a company that represent a part of the company’s social capital. However, there are some important differences between them that should be taken into account:

• The type of company that issues them and degree of freedom for their transmission: The shares issued by companies shares, they are those in which the social capital is divided into equal parts called shares, they can be bought and sold freely in the market, while the stakes issued by companies limited, that cannot be freely transmitted on the market, but requires the authorization of the rest of the partners or compliance with certain legal or statutory requirements.
• The type of rights granted to their owners: The shares give economic and political rights, which means that the shareholders may receive a proportional part of the profits generated by the company (dividends) and participate in making decisions that affect the company (voting at shareholder meetings). The stakes only grant economic rights, which means that the partners can only receive a proportional part of the benefits generated by the company, but they cannot participate in making decisions that affect the company (they cannot vote in the partners’ meetings ).

An example of a company that issues shares is the company Inditex, which is listed on the stock market and its shares can be freely bought and sold on the market.

An example of a company that issues stakes is Ikea.

These are the main differences between a share and a stake. If you want to know more, they are regulated in the Capital Companies Law.

Related concepts

• Shares
• Stakes
• Phantom Shares contract
• What is a right to repurchase shares or stakes?
• What is the difference between a Public Limited Company and a Limited Liability Company?
• Shareholder
• What is the difference between a real action and a personal action?