What Are Voting Rights?

What are Voting Rights?

When you buy stock in a company, sometimes that stock comes with Voting Rights. A Voting Right allows a shareholder to vote on important corporate matters that are raised by the Board of Directors or others, such as electing a new member to the Board of Directors or deciding whether the company should be sold.

Usually one share of stock has one Voting Right, so the more shares you have, the more votes you have, and the bigger the impact you as a shareholder, or owner of the company, can have on the outcome of the vote.

However, not all types of stock have Voting Rights. Usually common stock has Voting Rights and preferred stock does not, but a company can have different classes of common stock that have different Voting Rights. For example, a company can give one class more Voting Rights per share, or it can give another class none at all.

Remember, a Voting Right allows a shareholder to vote on important corporate matters. Just make sure you know the Voting Rights for your particular stock before you buy it.

Load more
Learn how to trade with our free stock market game