Preferred Stock
Preferred Stock
- Preferred Stock is a form of capital stock that
confers priority on its owners over common stock owners in certain matters. The
dividend paid on a share of preferred stock is fixed in that that does not
fluctuate with the profitability of the company. Furthermore, the dividend need
not be paid if the company lacks the financial ability to do so. Unlike common
stock, preferred stock generally does not confer voting rights on the preferred
shareholders.
However, owners of Preferred Stock have priority over owners of Common Stock with respect to dividends, bankruptcy and dissolution. In other words, as a group they have the right to receive distributions of their dividends and of their share of corporate assets upon liquidation before the common stockholders as a group.
Preferred stock may be any of the following types:
● cumulative preferred stock
● non-cumulative preferred stock
● participating preferred stock
● convertible 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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However, owners of Preferred Stock have priority over owners of Common Stock with respect to dividends, bankruptcy and dissolution. In other words, as a group they have the right to receive distributions of their dividends and of their share of corporate assets upon liquidation before the common stockholders as a group.
Preferred stock may be any of the following types:
● cumulative preferred stock
● non-cumulative preferred stock
● participating preferred stock
● convertible 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.