Three types of shareholder equity
1. Direct Interest
- Shares are registered in your own name
- Or held by a Nominee Company on your behalf
- While you remain entitled to the dividends and voting rights
Key Point: The shares may not be registered in your name, but the beneficial ownership belongs to you.
2. Indirect Interest
- You do not hold the shares directly
- But you control or benefit from them through another entity
- Common examples include:
- Shares held by a controlled company
- Shares held under a trust where you are the beneficiary
Key Point: The shares are held by someone else, but you have control or beneficial ownership.
3. Deemed Interest
- You do not directly or indirectly own the shares
- However, the law treats you as having an interest due to a specified relationship
- Common examples include:
- Spouse
- Children
- Trustee
- Controlled company
- Contractual or other legal arrangements
Example:
- If a director's spouse owns 10% of a company
- The director is legally deemed to have an interest in those shares
- And may be required to disclose that interest
Key Point: The shares are not yours, but the law deems you to have an interest.
| Type of Interest | Summary |
|---|---|
| Direct Interest | Shares are registered in your own name or held by a nominee, while the beneficial ownership remains with you. |
| Indirect Interest | Shares are held through a company, trust, or another person, but you retain control or beneficial ownership. |
| Deemed Interest | You do not own the shares directly, but the law treats you as having an interest because of relationships such as a spouse, child, trustee, controlled company, or legal arrangement. |