The Royal Dutch Shell, known as Shell, otherwise, is a multinational oil and gas company founded in 1907 (i.e., the original amalgamation) and later after the British-Dutch partnership in 2005.
Its headquarters are in The Hague, Netherlands, and it is also a Public Corporation in the United Kingdom. It is the third-largest corporation in the world, calculated in terms of revenues.
Shell has its part in exploring oil and gas reservations, oil production, refining and distributing the oil globally. It is also involved in power generation, petrochemicals and trading. The company also works under the trend of renewable energy.
It has its operations extended over 70 countries, with 44,000 service stations all around the world.
Its first amalgamation in 1907 was between two rival companies, one of the Dutch, i.e., the Royal Dutch Petroleum Company and the other of the British, i.e., the Shell Transport and Trading Company Limited.
But later on, in 2005, the British and the Dutch company undertook a partnership and started functioning as a single unit for business purposes.
The company in the stock market is registered as RDSA and RDSB. These are nothing but classifications of the company’s shares. Both shares have similar rights but are distinct in their characteristics.
- RDSA and RDSB are both stocks issued by the Royal Dutch Shell company, but RDSA is listed in Amsterdam, and RDSB is listed in London.
- RDSA has a slightly different share structure than RDSB, with the former having only one class of shares and the latter having two.
- RDSA tends to have a higher trading volume than RDSB due to its listing on the larger Amsterdam exchange.
RDSA vs RDSB
RDSA and RDSB are two different shares offered by the international oil and gas corporation Royal Dutch Shell. RDSB shares are listed on the London Stock Exchange, earning money from the United Kingdom. RDSA shares are listed on the Amsterdam Stock Exchange and earn money from the Netherlands.
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|Parameter of Comparison||RDSA||RDSB|
|Association||RDSA is associated with the Royal Dutch Shell Company, Netherlands.||RDSB is associated with the Shell Transport and Trading Company, UK.|
|Currency||It comes under the Dutch tax system, and the currency to pay here is in Euros.||It comes under the UK tax system, and the currency to be paid is in Pound Sterling.|
|Percentage of shares||RDSA controls 57.5 per cent of the company’s total shares.||The rest, 43 per cent, is controlled by the RDSB.|
|Tax system||It imposes a 15-25 per cent withholding tax on dividends.||The shareholders are not subjected to any withholding tax.|
|Voting power||The shareholders exercise no voting power, but they have access to assets immediately in case of bankruptcy in the company.||Although they have voting power, they can have their assets only after the RDSA shareholders receive theirs in case of bankruptcy.|
What is RDSA?
The Royal Dutch Shell A shares or RDSA shares are a classification of the Royal Dutch Shell Company shares. It is in association with the original company in the Netherlands and is based in Amsterdam.
Being listed under the Dutch tax system, it has a Dutch withholding tax of 15-25 per cent on the dividends. The currency used for payment in RDSA is the Dutch currency, i.e., Euros.
RDSA, as the A-shares of the company, has control over 57.5 per cent of the total shares of the company. Although the shareholders do not exercise any voting power in the company, they have immediate access to the assets or shares if a case of bankruptcy occurs.
The shareholders can fear bankruptcy. RDSA, in turn, guarantees them the right to access their shares if such a situation arises.
What is RDSB?
The Royal Dutch Shell B or RDSB shares are another class of the Royal Dutch Shell Company shares. It is London based and is in association with the Shell Transport and Trading Company in the UK.
It comes under the UK tax system and does not impose any withholding tax on dividends. The currency used here is the UK’s, i.e., Pound Sterling.
RDSB shares control the remaining 43 per cent of the company’s total shares. The shareholders exercise voting power, but they have to wait for the RDSA shareholders to access their assets in case of bankruptcy.
Because RDSB shares do not have any withholding tax, many people are organically turning to investing in RDSB. But this advantage also has a price to pay.
Main Differences Between RDSA and RDSB
- RDSA is linked with the original company in the Netherlands, while RDSB is linked with Shell in the UK.
- Euros are the currency used in RDSA shares, whereas Pound Sterling is used in the case of the RDSB.
- RDSA controls 57.5 per cent, while RDSB controls the rest 43 per cent of company shares.
- A withholding tax is imposed on the RDSA shares, but no such tax is imposed on the RDSB shares.
- RDSB exercises voting power; while there is no such policy in RDSA, they get access to their assets first in bankruptcy.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.