Börsenlexikon: Profit participation certificate

The profit participation certificate is the securitized form of a profit participation right. The exact definition and form of the profit participation certificate depends on the respective legal system. Under Swiss law, the profit participation certificate is governed by Art. 657 of the Swiss Code of Obligations[1]. According to the law, it is a profit participation right that may only be granted to persons who are already associated with the company, such as shareholders, creditors or employees. The profit participation certificates must be enshrined in the articles of association and may not have a nominal value. As a consequence, they may also not be issued against a capital contribution. They may confer an entitlement to a share of the balance sheet profit, a share of the liquidation proceeds or to subscribe to new shares, but not other rights. In particular, non-voting equity securities cannot carry voting rights. By law, the holders of profit participation certificates form a community and can, for example, only waive their rights with binding effect by majority resolution. The best-known non-voting equity security on the Swiss stock market is the Roche non-voting equity security.