Transferable shares / Registered shares

Louis Mummenthaler
22. März, 2025

Table of Contents

  1. Introduction
  2. What Are Transferable Shares?
  3. What Are Registered Shares?
  4. Difference Between Transferable and Registered Shares
  5. Legal Aspects of Registered Shares
  6. Legal Aspects of Transferable Shares
  7. Advantages of Registered Shares
  8. Advantages of Transferable Shares
  9. Registration of Registered Shares – Practical Aspects
  10. Rules for Transferring Shares
  11. Taxation of Registered Shares
  12. Conclusion – Choosing the Right Share Type

Legal Insights, Benefits, and Differences

In today’s global corporate world, understanding the distinction between transferable shares and registered shares is essential for anyone involved in business structuring, investment strategies, or company formation. These share types play a vital role in defining ownership rights, transferability rules, taxation obligations, and transparency levels within a corporation — especially in jurisdictions like Switzerland, where legal precision and financial responsibility go hand in hand.

Whether forming a Swiss AG, establishing a Swiss GMBH, or engaging Company law services, knowing the difference between these shares can influence legal protections and business flexibility.

What Are Transferable Shares?

Transferable shares are ownership units in a company that can be freely sold or transferred from one party to another, typically without requiring the approval of other shareholders or the company’s board. They are common in publicly traded corporations and large private companies where liquidity and ease of share movement are important.

Key Features of Transferable Shares:
  • Freely transferable unless otherwise restricted by the Articles of Association
  • Often held anonymously in bearer form (though this has changed in many jurisdictions)
  • Found primarily in Swiss AG structures and larger international corporations

What Are Registered Shares?

Registered shares, by contrast, are issued in the name of the shareholder and entered into a company’s share register. This provides the company with full knowledge of its ownership structure.

Key Features of Registered Shares:
  • Shareholder’s identity is officially recorded in the share register
  • Transfers must be logged and often require approval
  • Common in both Swiss AG and Swiss GMBH structures

Difference Between Transferable and Registered Shares

Understanding the difference between transferable and registered shares helps business owners decide which type fits their operational and legal needs. Here’s a concise comparison:

Feature

Transferable Shares

Registered Shares

Ownership Disclosure

Often anonymous

Fully disclosed

Transfer Process

Freely transferable

Requires registration

Legal Control

Less oversight

Greater control by company

Common Structure

Publicly traded companies

Private companies, SMEs


In many jurisdictions, including Switzerland, bearer shares (previously a form of transferable shares) have been largely replaced due to transparency regulations.

Legal Aspects of Registered Shares

The legal aspects of registered shares involve obligations for both the company and shareholder:
  • Must maintain an up-to-date share register
  • Share transfers must be formally documented and approved if the Articles so require
  • Certain rights (voting, dividends) only apply to registered holders
These regulations are in place to increase corporate transparency and comply with anti-money laundering legislation. In Switzerland, the legal basis for registered shares is found in the Swiss Code of Obligations (Articles 684–686): https://www.fedlex.admin.ch/eli/cc/27/317_321_377/en

Legal Aspects of Transferable Shares

Although the term “transferable shares” is broadly used, the legal aspects of transferable shares depend on the issuing company’s bylaws and national legislation. Generally:
  • They can be transferred by endorsement or delivery
  • Transfer restrictions must be explicitly stated in the Articles of Association
  • They are subject to disclosure requirements under transparency laws
Swiss legislation now requires shareholder identities to be disclosed for formerly bearer shares, increasing regulatory compliance.

Advantages of Registered Shares

The advantages of registered shares include:
  1. Transparency – Full visibility of shareholders
  2. Corporate Control – Easier to manage voting rights and strategic direction
  3. Legal Security – Easier to enforce shareholder rights
  4. Regulatory Compliance – Meets international AML and transparency standards
For businesses using Swiss GMBH structures, where all shares are registered, these benefits are embedded in the legal foundation.

Advantages of Transferable Shares

Despite reduced use in their traditional bearer form, the advantages of transferable shares remain valid in the right context:
  1. Liquidity – Facilitates investor entry/exit
  2. Ease of Ownership Change – Especially in public companies
  3. Reduced Administrative Burden – Fewer transfer formalities
In Swiss AG settings, transferable shares may be structured with limitations to balance control and flexibility.

Registration of Registered Shares – Practical Aspects

The registration of registered shares includes:
  • Entry into the official shareholder registry
  • Verification of identity and compliance with share transfer terms
  • Updating records in case of address or status changes
Failure to register properly can lead to the loss of voting rights and dividend entitlements.

Rules for Transferring Shares

The rules for transferring shares depend on the share type and company’s governance documents:
  • Transferable shares may be sold without formal consent (unless restricted)
  • Registered shares require approval, especially in closed companies or family firms
Companies must clearly define transfer restrictions in their Articles of Association to avoid future disputes.

Taxation of Registered Shares

The taxation of registered shares follows general principles of capital ownership:
  • Capital gains on share sales may be tax-exempt for individuals (private capital gains)
  • Dividends are subject to withholding tax (typically 35% in Switzerland)
  • Registered shares help tax authorities track share ownership more accurately
Tax planning strategies often leverage the clarity of ownership provided by registered shares for legal optimization.

Conclusion – Choosing the Right Share Type

Choosing between transferable shares and registered shares depends on your business goals, need for control, regulatory environment, and shareholder profile. For many businesses using Company law services, combining both types strategically within a Swiss AG or Swiss GMBH structure offers the best of both worlds.

Understanding the difference between transferable and registered shares isn't just academic—it shapes corporate governance, compliance, and investor confidence. With a proper setup, well-managed registration of registered shares, and adherence to the rules for transferring shares, your company will be positioned for growth with a legal foundation that reflects transparency and flexibility.

FAQ

Transferable shares are ownership rights in a company that can be sold or passed on to another party with minimal restrictions, often without board approval.