Tennessee Reclassification of Class B common stock into Class A common stock
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How to fill out Reclassification Of Class B Common Stock Into Class A Common Stock?
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FAQ
Commonly, Class B shares are held by promoters or senior management of a company and carry significantly higher voting rights than Class A shares. It effectively allows firms to raise capital (by selling Class A shares) while retaining control of voting (and retaining Class B shares).
Pursuant to the Company's amended and restated certificate of incorporation (the "Charter"), class B shares generally may not be transferred until the Escrow Termination Date (as defined in the Charter).
The Bottom Line. Class A and Class B shares differ in their availability, convertibility, and power as it relates to voting. One isn't necessarily better than the other, but Class A shares offer significant benefit in the event of a sale or when an outside force wants to obtain more voting power.
What Are Class B Shares? Class B shares are a classification of common stock that may be accompanied by more or fewer voting rights than Class A shares. Class B shares may also have lower repayment priority in the event of a bankruptcy.
B shares also have voting rights in the company, but their dividends are worked out based on a lower rate. C shareholders have the same rate of dividends as A shareholders, but have no voting rights at all.
Class A shares may offer 10 voting rights per stock held, while class B shares offer only one. It depends on how the company decides to structure its stock. Class B shares are lower in payment priority than Class A shares.
The process of converting issued shares from one class or group into another is called re-designation, re-classification, re-naming or converting of shares.
Class B shares are financial instruments which represent ownership in a company and proportionate claims on its assets. They exist in companies with dual-class structures or with multiple classes of stock with differences in their voting rights attached to each class.