BizTerm Definition
Classes of Stock
Short Definition
Stock type determining shareholder rights.
Full Definition

The equity benefits & rights inherent in stock ownership are determined by their description in the Articles of Incorporation or "class" and the state's (of incorporation's) statues. The different classes of stock of a corporation will define shareholders' rights such as: Board representation; super majority voting; nonvoting equity participation; limitation on board discretion; and payout upon dissolution. Most stock are broken down into "common" or "preferred" classes of stock.

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