The digital stock corporation

Tokenized shares – The digital share ledger

Issuing shares is one of the oldest forms of corporate finance. In 1602, the first modern corporation to be founded was the Dutch East India Company. Tokenized shares combine a long legal tradition with a new type of digital fundraising.

With tokenized shares (security tokens), transfer is simplified. Shareholders can transfer shares digitally. Through the technical implementation based on distributed ledger technology (DLT) / blockchain, it is possible to eliminate middlemen. In addition, the transfer becomes more secure. Each transfer is stored in a digital ledger. This guarantees that the share ledger is tamper-proof and error-free.

Share Register

The share register is managed by the Board of Management of an AG. Only those who are entered in the share register are shareholders of the AG. The share register can also be kept electronically.

Security token

Security tokens embody claims to payouts against the issuer. They are based on the law of obligations or corporate law.

The Model

  • Shares of an Austrian AG are digitized by means of tokens (tokenized shares).
  • By their nature, shares are particularly easy to transfer.
  • The digitization of shares requires a corresponding provision in the articles of association authorizing the management board to do so.
  • The transfer of a token is equivalent to the transfer of a share.
  • The virtual stock corporation: voting can take place via the blockchain.
  • Dividend distribution is also possible through tokens.

Tokenized shares

Tokenized shares represent registered shares of an unlisted Austrian AG. They may also include claims under company law, such as voting rights at the virtual general meeting.

This allows the following goals to be achieved

  • Easier, faster and more efficient transfer and settlement: transfer, exchange and trade are possible; shareholders are therefore flexible and are not tied to the company and the board. No middleman is required. Fraud and errors in share transfers can be prevented.
  • Internationalization: the entire structure can be handled digitally, without a physical presence; this opens up an international investor approach.
  • Attractive form of financing: an illiquid asset class becomes shares that can be traded globally around the clock.
  • Digital share ledger: By combining high transparency and automatic encryption, a high level of security can be guaranteed for shareholders.

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