A privilege that is granted to specific stock issues (common shares), entitling the shareholder to participate, along with other shareholders, in taking certain corporate decisions, such as electing the board of directors (BOD) and voting on a merger, acquisition, or spin-off. Voting rights are spelled out in the company’s prospectus. Voting rights reflect the voting power of equity stake. A shareholder’s voting rights are usually proportional to his share of the paid-up capital of the company.
However, some preference shares (preferred shares) entitle their holders to vote only on resolutions which directly affect the rights attached thereto. Examples of such resolutions are: the winding up of a company, the reduction of its share capital, etc.
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