What are the different types of stocks?


What are the different types of stocks?

When issuing shares (share issue), companies can opt for very different types of shares, which refer to different rights of the shareholder (stockholder ). By purchasing shares, shareholders participate in a company as co-owners. The most important rights associated with shareholding are listed below:

  • Voting rights
  • Right to information
  • Right to share profits (dividend distribution)
  • Participation in the Annual General Meeting

Depending on the class of shares, the constellation of rights granted may differ. Here is an overview of the most important types of shares (classes ) and their special features:

  • Ordinary shares (common stocks ) are the most common form of shareholding. They grant all of the aforementioned rights through their acquisition.
  • Preferred shares usually have higher profit participation than common shares of the same company and may grant reduced or no voting rights.
  • Registered shares can be purchased by anyone. However, the respective owner is entered in the share register.
  • Restricted registered shares are registered shares that can only be acquired with the consent of the stock corporation.

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