A wide variety of shares, other equity securities and debt securities may be issued under the laws of the Member States. There are considerable differences in the nature of the rights appertaining to, the methods of transfer, and the forms of such securities. The variety of such instruments appears especially extensive in France. The public issue of shares and other securities may be rendered impossible by law in the case of private companies and often proves to be difficult for small and medium sized enterprises. Such companies may have to rely at least temporarily on their retained earnings and borrowings from banks as sources of finance.

In the present chapter a brief account will be given of the types of equity securities issued in the relevant Member States. This will be followed by an account of the increase and reduction of shares, and certain other matters relating to share capital. The phrase ‘equity security’ is generally (but not always) used in the present chapter to denote a security which may usually be regarded as the counterpart to the shareholder's contribution to the company's capital, and which generally confers both patrimonial (proprietary) and personal rights. Some securities are difficult to classify. The phrase ‘equity security’ is used in a restrictive sense in section 560 of the UK Companies Act 2006, which excludes shares which with respect to dividends and capital carry a right to participate only up to a specified amount in a distribution from the definition of such a security.