In
finance
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of f ...
, a share class or share classification are different types of
shares in company
share capital
A corporation's share capital, commonly referred to as capital stock in the United States, is the portion of a corporation's equity that has been derived by the issue of shares in the corporation to a shareholder, usually for cash. "Share capital ...
that have different levels of voting rights. For example, a company might create two classes of shares
class A share and a
class B share where the class A shares have fewer rights than class B shareholders. This may be done to maintain control of a company by a group of shareholders or to make a company more difficult to take over.
For example, a company may create
preferred stock as a
poison pill that so that all Shareholder of
common stock
Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Comm ...
cannot agree to a merger or takeover plan.
There is no statutory procedure for converting shares from one class to another. It may be done with the consent of all the shareholders affected. The safest course is to pass a resolution to which all the shareholders consent because, in practice, changing the rights on one person's shares may well have an effect, at least in practice on the rights of all the other shareholders.
Classes
Companies can have the following classes:
*
Ordinary shares
*
Preference shares
*
Non-voting stock
*
Redeemable shares
*
Convertible shares
* Deferred shares
See also
*
Partly paid
*
Phantom stock
*
Restricted stock
*
Shareholder
A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal o ...
*
Stock option
In finance, an option is a contract which conveys to its owner, the ''holder'', the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified d ...
References
{{reflist
Equity securities