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Non-Voting Stock

Non-voting stock is a type of equity security that provides shareholders with ownership in a company but does not grant them voting rights in corporate decisions, such as electing the board of directors or approving mergers.

Example

A company issues non-voting stock to raise capital while allowing the founders to retain decision-making control over corporate matters.

Key points

• Equity that gives shareholders ownership but no voting rights in corporate decisions.

• Shareholders can still benefit from dividends and capital appreciation.

• Often used by companies to raise capital while maintaining control over decisions.

Quick Answers to Curious Questions

It allows companies to raise capital without diluting control over corporate governance and decision-making by the existing management or controlling shareholders.

Investors can still receive dividends and benefit from stock price appreciation, providing financial returns without having a say in company decisions.

Shareholders have no influence over corporate decisions, which can limit their ability to protect their investment interests or influence company strategy.