ARCH 131 Study Guide - Retained Earnings, Authorised Capital, Issued Shares

• School: Simon Fraser University
• Department: Archaeology
• Course: ARCH 131
• Professor: Steve Gibson

Document Summary

11-6 common shares carry a basic set of rights. This is only a right if it is written into the articles of incorporation when the corporation is first formed. Preferred shares differ from common shares in that they are given a preference with regard to dividends. Preferred shares must be paid dividends first before common shares are entitled to receive dividends. Preferred shares also have different rights from the basic rights of the common shares. Typically, the preferred shares are non-voting or carry a lesser right to vote (for instance, a half a vote per share). If the corporation decides to liquidate, preferred shareholders usually have a claim on assets prior to the claim of common shareholders. There are many other features of preferred shares that are different from common shares. 11-19 a company may make the decision to go private as well. This will normally happen when there is a large majority shareholder already present.