Ordinary Shares (Common Stock in US markets) represent basic equity ownership in a company with voting rights and dividend entitlement.
Core Rights
| Right | Description |
|---|
| Voting | One vote per share at general meetings |
| Dividends | Receive dividends when declared by board |
| Capital growth | Participate in company value appreciation |
| Winding up | Residual claim after debt and preference shares |
Share Classes
| Class | Voting | Economic Rights | Common Use |
|---|
| Standard Ordinary | 1 vote per share | Equal | Most common structure |
| Non-voting | No votes | Equal dividends | Retain control with founders |
| Dual-class (A/B) | Different ratios | Usually equal | Tech companies, family firms |
| Deferred | Usually 1 vote | Reduced/postponed | Special situations |
UK Market Rules
| Listing Type | Share Class Rules |
|---|
| Premium Listing | Single class, equal voting (FTSE eligibility) |
| Standard Listing | More flexibility permitted |
| AIM | Dual-class structures allowed |
UK shares have nominal (par) value, typically 1p, 10p, or £1.
Shareholder Rights
Standard rights include:
- Attend and vote at AGMs and general meetings
- Receive annual reports and financial statements
- Pre-emption rights (subscribe pro-rata to new issues unless disapplied)
- Proportionate share of surplus assets on liquidation
Ordinary Shares vs Other Securities
| Security | Key Difference |
|---|
| Preference shares | Fixed dividend, usually no voting |
| Debt (bonds/loans) | Contractual repayment, not ownership |
| Warrants/options | Right to acquire, not actual ownership |
