By: Allen T. May, C.E.O. of Westwood Associates, LLC.
There are two basic types of stock. Owners of common stock may vote on corporate matters. Generally, an owner of common stock has one vote for each share owned. However, any claims of common-stock owners on profits and assets of the corporation are subordinate to the claims of others. The owners of preferred stock usually have no voting rights, but their claims on dividends are paid before those of common-stock owners. Although large corporations may issue both common and preferred stock, generally small corporations issue only common stock.
Perhaps the most important right of owners of both common and preferred stock is to share in the profile earned by the corporation through the payment of dividends. A dividend is a distribution of earnings to the stockholders of a corporation. Other rights include receiving information about the corporation, voting on changes to the corporate charter, and attending the corporation's annual stockholder's meeting, where they may exercise their right to vote.
Because common stockholders usually live all over the nation, very few actually may attend a corporation's annual meeting. Instead, they vote by proxy. A proxy is a legal form listing issues to be decided at a stockholder's meeting and enabling stockholders to transfer their voting rights to some other individual or individuals. The stockholder can register a vote and transfer voting rights simply by signing and returning the form. Today, most corporations also allow stockholders to exercise their right to vote by proxy by accessing the internet or using a toll-free phone number.
For more information please contact me as follows:
Allen T. May
cell: (214) 893-2623
email: allentmay@gmail.com
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