Does every share in corporation carry the right to vote? Why or why not?

Question

Does every share in corporation carry the right to vote? Why or why not?

Answer 1

Not necessarily. A company may have different classes of common stock. Most common shares do carry voting rights. However, a company may also issue another class of stock, say class 'A' shares, which will be equal as far as sharing in the profits through dividends and in the event of a change of control, but they cannot participate in election of the board of directors or any other proxy matters. This type of non-voting stock is most likely to be issued by a company where the founders and their families want to be sure that they will retain voting control and discourage any takeover attempts. Although the dividend and other rights remain equal, the non-voting class of stock will normally trade at a discount to the ordinary shares.

Companies may also have preferred shares outstanding. Most of these issues do not have voting rights, as well.

Answer 2

Not every share of a corporation carry the right to vote. Two types of stocks exists: common and preferred. Common stocks carry voting rights, while preferred stocks don't carry voting rights. Holders of preferred stocks are paid dividends upon liquidation of a company before holders of common stocks.