Voting shares are a category of common shares that give the person who acquired them one vote per share they own. If you own these shares, you are partial owner of the company.
If you own these shares, you are partial owner of the company. Issuing these types of shares generates a larger potential investor pool, gives investors more control over how the company is run, and inhibits the possibility for company owners to take advantage of the company’s resources.
While this type of share entitles its holders to a number of rights, it does have one major drawback: common stock shareholders are the last in line to receive the company’s dividend payments--after preferred shareholders have been paid. It also means that if the company goes bankrupt, the common stock shareholders receive whatever assets are left over only after all creditors, bondholders, and preferred shareholders have been paid in full.
Non-voting shares are common shares that do not give the person who has acquired the right to vote on issues regarding the management and operations of the company. While this may reduce the potential investor pool, issuing non-voting shares preserves management and initial investors’ control of the company and its revenue-generating opportunities.
Preferred shares have priority in respect of distribution. Preferred shareholders will receive a distribution of profits prior to the distribution to the common shareholders.
Consideration shares are issued in consideration of its non-monetary value, typically to purchase non-cash tangible and intangible assets, such as property, land, buildings, vehicles, skilled workers, top-level professionals etc. While it can be difficult to determine the value of consideration shares, the general rule is to record these transactions on the basis of fair market value of the non-cash asset acquired or the fair market value of the stock issued, whichever can be more reliably determined.
