In some cases, individuals who start a business have special voting rights that help them exercise more control over the firm. T

Question

Ronch [10]

3 years ago

6

In some cases, individuals who start a business have special voting rights that help them exercise more control over the firm. T

hey own a special class of stock called

Business

1 answer:

Olin [163] · Answer 1 · 2022-06-19T06:42:51+03:00

individuals that have special voting rights owns a special class of stock called classified stock.

The classified stock refers to class of common stock that comes with special privileges like dividend rights or enhanced voting rights.

Usually, these stock are issued/owned by individual that started or co-start the business.

The classified stock is used to ensure the company's founders maintain its control over the establish company even without owning the majority of the common stock.

Therefore, the individuals that have special voting rights owns a special class of stock called the classified stock.