Voting shares are the shares of the stock that allow a share holder to vote on the company matters. The voting shares give power to the share holder to have a say in the vital and important matters of the company.
The working of the Voting Shares
The stocks or the equities of a company represent the ownership of the shareholder in the company. For example if you owe a single share, 100 shares or a million shares of a company you are referred as the owner of the company. The major objective of the companies to sell the shares or the ownership of the company to the investors is to attract investors to gain cash to run the operations of the business. There are different types of equities or shares and their classification depend upon the rights they grant to their holder.
The most prominent aspect of the voting share is that it allows and grants the power of voting in the company matter. The owner can give one vote for every share that is owned by the share holder. The stock holders also have rights of first refusal or the pre-emptive rights that means the shareholder has first right of refusal or dibs on buying any new stock that is being issued by the company.
Another attribute of the voting shares in terms of common stock is that their holders are numbered at the end when the time comes in terms of receiving the money or the dividend issued on the common stock.
Why Voting Shares are Important
Voting shares are important because they hold a lot of power. A number of companies also issue non-voting shares so that the power of voting is held with the founders or the board of directors of the company.
Other Related Accounting Articles: