Get Started in Shares

No right to vote

To this point we have assumed that a company issues only one type of ordinary share; and each of these has equal powers – the equity holders are equally ranked. However non-voting shares or reduced voting shares are sometimes issued by family-controlled firms which need additional equity finance but wish to avoid the diluting effects of an ordinary share issue. These shares are often called ‘A’ shares or ‘B’ shares (or N/V) and usually get the same dividends, and the same share of assets in a liquidation, as the ordinary shares.

The issue of non-voting or reduced voting shares is contentious, with many investors saying that everyone who puts equity into a company should have a vote on how that money is spent: the ‘one share one ...