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Simple English definitions for legal terms
class voting
Read a random definition: Article III
A quick definition of class voting:
Class voting is when different groups of shareholders in a company vote separately on important changes that affect their specific rights and privileges. For example, one group of shareholders may have more voting power when it comes to decisions about dividends, while another group may have more say in decisions about mergers and acquisitions. This helps ensure that each group's interests are represented fairly in the decision-making process.
A more thorough explanation:
Definition: Class voting is a method of shareholder voting where different classes of shares vote separately on fundamental corporate changes that affect the rights and privileges of that class.
For example, if a company has two classes of shares, Class A and Class B, and a proposal is made to change the dividend payout for Class A shares, only the Class A shareholders would vote on that proposal. This ensures that each class of shareholders has a say in decisions that directly affect them.
Class voting is important because it allows shareholders to protect their interests and ensures that decisions are made in a fair and equitable manner.