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Share class

Share class

Share class refers to different types of shares in a company, e.g. A and B shares, with different rights.

What is a share class?

Share class describes the fact that a limited company can have shares of different kinds — most commonly A and B shares. Different classes can carry different voting rights or different rights to dividends. The classes are set in the articles of association.

 

Common share classes

Examples are common shares and preference shares, where preference shares often have priority to dividends. Differences in voting power and dividends make share classes a useful tool when owners want to keep control while raising capital. All classes must appear in the share ledger.

Learn more about the shareholder register
Henrik Kristensen, NVR
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Related terms

A-share

An A-share is a share class that usually carries more votes per share than the company's other shares.

B-share

A B-share is a share class that usually carries lower voting power than the company's A-shares, often a tenth.

Common shares

Common shares are the most usual shares in a company and normally carry full voting rights.

Preference shares

Preference shares are a share class that gives priority to dividends over other shares.