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In finance, a class A share refers to a share classification of common or preferred stock that typically has enhanced benefits with respect to dividends, asset sales, or voting rights compared to Class B or Class C shares.
The Series A Preferred Stock, voting separately as a class at each annual meeting, shall be entitled to nominate and elect a number of directors equal to one-third of the total number of directorships (each director entitled to be elected by the Series A Preferred Stock, a ?Series A Director?).
Series A-1 Preferred Stock means the shares of the Company's preferred stock, par value $0.001 per share, designated as Series A-1 Preferred Stock in the Company Certificate of Incorporation. Series A-1 Preferred Stock means Series A-1 Convertible Preferred Stock of the Company, par value $0.001 per share.
The main difference between preferred and common stock is that preferred stock gives no voting rights to shareholders while common stock does. Preferred shareholders have priority over a company's income, meaning they are paid dividends before common shareholders.
Preferred stocks are equity investments, just as common stocks are. However, preferred stocks yield a set dividend that must be paid in preference to any dividend paid to owners of common stock. Like bonds, preferred stocks may be purchased for their regular income payments, not their market price fluctuations.
The first round of stock made available to the public by a startup is referred to as Series A preferred stock. This type of stock is generally offered for purchase during the seed stage of a new startup and can be converted into common stock in the event of an initial public offering or sale of the company.
Preferred typically have no voting rights, whereas common stockholders do. Preferred stockholders may have the option to convert shares to common shares but not vice versa. Preferred shares may be callable where the company can demand to repurchase them at par value.
The four main types of preference shares are callable shares, convertible shares, cumulative shares, and participatory shares. Each type of preferred share has unique features that may benefit either the shareholder or the issuer.