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The one-class-of-stock rule prevents the corporation from having the complexity related to allocating earnings to multiple classes of owners. A corporation has only one class of stock if all outstanding shares provide for identical rights to stockholders regarding distribution and liquidation proceeds.
Common and preferred are the two main forms of stock; however, it's also possible for companies to customize different classes of stock in any way they want.
There are four general types of Preferred Stock: Non-Cumulative Shares: No back payment of deferred dividend payments. Participating: Offer higher-than-normal dividends when profits are higher-than-normal. Convertible: Option to convert shares into Common Stock if desired.
Class F Common Stock was developed by the Founder Institute to give founders voting control over their startups. The ?F? stands for ?Founder? but you can call the stock whatever you want. The key feature of Class F Common Stock is its voting rights.
Common stock typically provides voting rights and may include dividends; preferred stock typically guarantees dividends but does not include voting rights. One reason companies distinguish among different stock classes is to protect themselves from a takeover.