Georgia Reclassification of Class B common stock into Class A common stock
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How to fill out Reclassification Of Class B Common Stock Into Class A Common Stock?
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FAQ
Class B shares typically have lower dividend priority than Class A shares and fewer voting rights. However, different classes do not usually affect an average investor's share of the profits or benefits from the company's overall success.
Class A, common stock: Each share confers one vote and ordinary access to dividends and assets. Class B, preferred stock: Each share confers one vote, but shareholders receive $2 in dividends for every $1 distributed to Class A shareholders. This class of stock has priority distribution for dividends and assets.
Class A, common stock: Each share confers one vote and ordinary access to dividends and assets. Class B, preferred stock: Each share confers one vote, but shareholders receive $2 in dividends for every $1 distributed to Class A shareholders. This class of stock has priority distribution for dividends and assets.
Class B shares are financial instruments which represent ownership in a company and proportionate claims on its assets. They exist in companies with dual-class structures or with multiple classes of stock with differences in their voting rights attached to each class.
Class B shares are lower in payment priority than Class A shares. That means if a company were to go bankrupt and be forced into liquidation, Class A shareholders would be paid out first, then Class B. Class B shares can also be issued for reasons that aren't only to benefit the company and executives.
Commonly, Class B shares are held by promoters or senior management of a company and carry significantly higher voting rights than Class A shares. It effectively allows firms to raise capital (by selling Class A shares) while retaining control of voting (and retaining Class B shares).
B shares also have voting rights in the company, but their dividends are worked out based on a lower rate. C shareholders have the same rate of dividends as A shareholders, but have no voting rights at all.
The Bottom Line. Class A and Class B shares differ in their availability, convertibility, and power as it relates to voting. One isn't necessarily better than the other, but Class A shares offer significant benefit in the event of a sale or when an outside force wants to obtain more voting power.