Concepts and international practice
Super-voting shares represent a special class of shares that grant their holders greater voting rights compared to other classes of shares. Typically, these shares provide two or more votes per share, while common shares provide one vote. This structure enables the retention of control over the company with a smaller ownership stake.
Dual-class shares refer to the existence of two or more classes of shares within a single joint stock company, where the classes differ in voting rights, dividend rights, or other rights.
These structures are widely used in Anglo-Saxon law and on global capital markets, especially among technology companies (e.g., Alphabet/Google, Meta/Facebook), to preserve founders’ control over the company after an initial public offering (IPO).
Legal framework in the Republic of Srpska
The Company Law of the Republic of Srpska (“Official Gazette of RS,” nos. 127/08, 58/09, 100/11, 67/13, 100/17, etc.) provides certain room for creating different classes of shares, including the possibility of different voting rights, but the concept of super-voting shares as a specific term is not explicitly regulated.
a) Article 180 of the Company Law – Types of shares
“Shares may be common and preferred.”
- Common shares grant voting rights, the right to dividends, and the right to participate in the distribution of assets in case of liquidation.
- Preferred shares may provide higher dividends, priority in payment, and limited voting rights, or they may even be deprived of voting rights entirely (e.g., non-voting preferred shares).
b) Article 181 – Different rights based on shares
“A company may issue multiple classes of shares that differ in rights.”
🔹 This opens the possibility for dual-class structures, where different classes of shares can be created with different voting rights.
Therefore, although the law does not use the term “super-voting shares,” it is possible for one person to hold a class of shares that carries more voting rights than another class, which functionally represents a super-voting model.
Limitations and requirements
Although it is possible to establish a dual-class system, the following conditions must be met:
- The company’s articles of association must precisely define all classes of shares and their rights, including the number of votes per share.
- The issuance of shares with multiple voting rights must not conflict with the principle of shareholder equality unless it is clearly and timely disclosed in prospectuses and the register.
- Regulatory restrictions: In the event of going public, the Securities Commission of the Republic of Srpska may limit the issuance or trading of shares with restricted or multiple voting rights, particularly if this endangers transparency and investor protection.
Practical application and challenges
In practice in the Republic of Srpska, dual-class structures are rare, mainly due to:
- The small size of the capital market,
- Underdeveloped institutional investors,
- A preference for simple ownership structures.
However, in closed joint stock companies, such structures can be used as a tool to retain control, especially in family-owned businesses that are growing and seeking external financing but wish to preserve founders’ control.
Conclusion
Although terminology such as “super-voting shares” and “dual-class shares” is not directly recognized in the legislation of the Republic of Srpska, the legal framework of the Company Law allows for their functional application through the creation of multiple classes of shares with different voting rights. For the lawful implementation of such structures, it is crucial to properly define the rights in the articles of association and during issuance, and to ensure transparency towards all shareholders.
Shares with super-voting rights and dual-class shares represent specific ownership control mechanisms in companies, allowing certain shareholders significantly greater influence over decision-making. While such a structure may be useful for maintaining control over a company, it may also raise concerns among minority shareholders regarding the balance of rights. In any case, the application of these instruments must comply with the legal framework, transparency rules, and the protection of the interests of all shareholders.
In the future, with the development of the capital market and potential IPOs of domestic companies, these structures could gain greater importance among domestic companies.
Krejić Nataša, Attorney
E-mail: natasa@afsajic.com
