Common Stock
Common Stock
- Common Stock and preferred stock are the two classes of equity securities that
can be authorized and issued to represent ownership in your corporation. You
issue common stock first. As the principal ownership of your corporation, owners
of your common stock enjoy the rights to vote at all shareholder meetings and to
receive a share of the company's residual earnings through dividends and/or
capital appreciation. If any preferred share was issued, then its owners are
paid dividends first. The remaining declared dividend, if any, is then
distributed to the common
stockholders.
Common stockholders elect your board of directors and may vote at annual and special meetings of the shareholders on numerous other matters. The general rule is one vote per share of common stock. Despite approval by your Board of Directors, your shareholders retain the right to vote to approve or reject certain corporate actions and transactions.
Upon dissolution or liquidation of a company, its holders of common stock wait last in line to receive a distribution from the company's assets. Ahead of them on the distribution list are the bondholders, other debt equity security holders, and holders of preferred stock.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
Copyright © 2003-2007 LawVantage.com, LLC. All rights reserved.
Important LawVantage.com, LLC and its website, CorporateBoardMinutes.com, do not render any legal, accounting or other consulting advice.
For legal advice, you should always consult with a qualified attorney-at-law.
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Common stockholders elect your board of directors and may vote at annual and special meetings of the shareholders on numerous other matters. The general rule is one vote per share of common stock. Despite approval by your Board of Directors, your shareholders retain the right to vote to approve or reject certain corporate actions and transactions.
Upon dissolution or liquidation of a company, its holders of common stock wait last in line to receive a distribution from the company's assets. Ahead of them on the distribution list are the bondholders, other debt equity security holders, and holders of preferred stock.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
Copyright © 2003-2007 LawVantage.com, LLC. All rights reserved.
Important LawVantage.com, LLC and its website, CorporateBoardMinutes.com, do not render any legal, accounting or other consulting advice.
For legal advice, you should always consult with a qualified attorney-at-law.
Website development by
Vine Design.