A Class Shares vs B Class Shares

In the Digital Notary , shares are categorized into two distinct classes:

Class A and Class B shares.

Each class has specific characteristics and rights that cater to different types of investors and company needs.

Voting Rights: Class A shares come with full voting rights, making them ideal for founders and venture capitalists who wish to have a say in the company's strategic decisions.
Ownership: Typically issued to founders, early investors, and key stakeholders, Class A shares provide control over the company’s direction and important corporate actions.
Dividends and Rights: Holders of Class A shares are entitled to dividends and have a significant influence on major decisions, such as mergers, acquisitions, and changes to the company's structure.

Non-Voting Rights: Class B shares do not carry voting rights, making them suitable for small investors or those who are interested in financial returns without being involved in management decisions.
Meeting Rights: Although they lack voting power, Class B shares grant holders the right to attend and speak at shareholder meetings, ensuring transparency and inclusivity.
Dividend Rights: Class B shareholders are entitled to dividends, similar to Class A shareholders, making these shares an attractive option for investors seeking income without governance involvement.

Flexibility in Capital Raising: By offering two classes of shares, companies can attract a diverse range of investors. Class A shares appeal to those seeking control, while Class B shares attract those interested in financial returns.
Strategic Control: Founders and key stakeholders can maintain control over the company’s decisions through Class A shares, even as they raise capital from a broader investor base.
Enhanced Corporate Governance: The distinction between voting and non-voting shares helps balance the need for governance and operational control with the desire to raise capital efficiently.

Last updated 10 months ago