Corporate Share Structure
Shares of corporate stock come in different varieties, each carrying different rights for the shareholder. For answers to specific questions about corporate shares of stock, a reader should contact a business lawyer.
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Corporate Stock
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Corporations issue shares of stock to investors. Each share is a certificate that represents that investor's ownership interest in the corporation.
Common Shares
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Most shares are common shares, which give the shareholder the right to vote on the board of directors, and to receive periodic dividend distributions from the company's profit.
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Preferred Shares
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Preferred shareholders have the right to fixed dividend amounts. Holders of preferred shares do not get to vote on the board, but they get to vote if the board should fail to give shareholders dividends. If a dividend declaration is missed, "cumulative" preferred shareholders are paid back before common shareholders are paid.
Liquidation
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Should the corporation decide to liquidate, it must first satisfy all creditors and bondholders. If the leftover assets are insufficient to pay back all investors, preferred shareholders are repaid before common shareholders are.
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References
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