UK Accounting Glossary
In the USA, the most important class of ordinary shares.
These are the most important class of ordinary shares in the US.
A shares usually have greater voting power than B shares and may carry various other additional privileges.
Class A shares refer to a classification of common stock that is accompanied by more voting rights than Class B shares; Class A shares are typically given to a company’s management team.
You may want to try and find a way to acquire some of their A shares so you know you are in early.
The investor wanted to diversify his portfolio by purchasing interest in mutual funds, we suggested the A Shares because of the front end load.
The difference between Class A shares and Class B shares of a company’s stock usually comes down to the number of voting rights assigned to the shareholder.
Class A shareholders generally have more voting power pertaining to them.
Typically a startup company has around 10,000,000 initial A shares of Common Stock, but as the company grows, it may increase the total number of shares as it issues shares to investors and employees.
Most class B shares “convert” into class A shares after a certain number years. When they convert, they begin to charge the same annual fund operating expenses as class A shares, which is lower. Some B shares convert to A shares after six years and almost all convert by the end of eight years.
Class A Shares. Class A shares are common stocks, as are the vast majority of shares issued. Investors in common shares are usually given at least one vote for each share they hold. They entitle the owners to vote at annual meetings, where board members are elected and company decisions are made.
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This glossary post was last updated: 6th May 2019.