Voting Rights
The right to vote on company matters, typically one vote per share for common and preferred alike.
Definition
Voting rights determine how shareholders can influence company decisions such as electing directors, approving major transactions, and amending corporate documents. In most standard structures, each share (common or preferred) gets one vote. Some companies create dual-class structures where founder shares get 10x voting power. Key votes include board elections, M&A approvals, and charter amendments.
Why it matters
As a common stockholder, you have voting rights, but your influence is minimal unless you hold a significant share count. Dual-class structures can mean founders control the company's direction regardless of ownership percentage.
Example
Founders hold Class B shares with 10 votes per share. Even after selling 70% of the company's economic value to investors, the founders control 80% of votes and can make unilateral decisions about the company's direction.