This module is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 1 of 6 · 13 min
Common shares: voting rights, share classes, callable and putable shares
Common shareholders own the company's residual value and govern it by voting; how votes are counted and how share classes are designed decide who really controls the board.
In short
- Common shares give a share of operating performance, voting rights and a residual claim in liquidation; dividends are not obligatory.
- Shareholders vote on directors, mergers and auditors, usually at the annual meeting, often by proxy.
- Statutory voting: one vote per share for each seat, so a majority holder wins every seat.
- Cumulative voting: votes = shares × seats being filled, and they can all go to one candidate. This gives minority holders a chance of board representation.
- Companies may issue classes of common shares with different voting, dividend or liquidation rights, often to keep control with founders.
- Callable shares let the issuer buy them back at a preset price; putable shares let the holder sell them back to the issuer at a preset price.
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