In general, there are three types of rights associated with shares: the right to vote, the right to receive dividends and the right to receive the remaining property of the corporation upon dissolution. These rights can be divided among different types or classes of shares. Normally, the Articles of Incorporation will provide that an unlimited number of shares can be issued of each class. Classes can be assigned names (e.g., common, preference, non-voting) or simply be listed (eg. Class A, Class B, Class C). There is virtually no limit to the type of other classes of shares that can be developed. Big public corporations typically have many different kinds of shares with different rights and privileges.
Where there is only one class of shares, the rights of all shareholders are equal. Where there are more classes of shares, each class may have different rights, privileges, restrictions and conditions. The number of shares of each class is unlimited, unless there is a maximum specified in the Articles.
As an example of how shares can be used as building blocks for corporate growth, Quattro Exploration and Production Ltd ($QXP) has been utilizing Class C shares to create financial transactions.
FAQ: How does purchasing property with Class C shares affect the day to day investor? Is this a concern for investors?
The issuance of Class C shares should not be seen as a concern for the day to day investor but rather as validation of the company’s management and business plan. Quattro utilizes the issuance of Class C shares as a low-cost source of capital, and investors see these Class C shares as a long term investment in Quattro’s potential. Class C shares provide a modest dividend return for investor’s patience and support in Quattro’s long term plan, without being a financial burden that hinders the company’s growth. Class A shareholders benefit from this as Quattro is able to execute its business plan at a low cost of capital, thus creating value for all shareholders. To learn more about Quattro Exploration and production Ltd, view Quattro's 80-20 Profile
“Share & Shareholders”. incorporationcanada.ca
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