Document background
The Certificate of Designation Preferred Stock is a crucial corporate document used when a German corporation (Aktiengesellschaft) wishes to create and issue a new series of preferred stock. This document is particularly important in corporate financing scenarios, including venture capital investments, corporate restructurings, or when companies need to raise capital without diluting voting control. Under German law, specifically the Aktiengesetz, the certificate must detail all rights and preferences attached to the preferred shares, including dividend rights, voting rights, liquidation preferences, and any conversion or redemption features. The document requires formal approval from the board of directors, proper execution, and registration with the German Commercial Register (Handelsregister). It serves as the governing document for the specific series of preferred stock throughout its lifetime and is essential for both the issuing company and investors to understand and enforce their respective rights and obligations.
