Types of shares of a corporation

The types of shares in a corporation are several, since each one of them demonstrates the rights that the shareholders have with the company. The different types of contributions made by the shareholders to the company give them rights. These rights may be economic or political.

Economic rights are given by allowing the shareholder to participate in the company's dividends each year. Political rights are those in which the shareholder may participate in the decision-making at the meetings of the company's shareholders' council.

These rights mean that the different shares The members of a corporation are distinguishable from each other. All shares of a corporation are not equal and do not confer the same rights to the shareholders who own them. This is stipulated by the company's bylaws and by law.

Types of shares

The types of shares permitted by Paraguayan law in a corporation are as follows:

Multiple voting or preferred or founding shares of Common Stock

Shares of this type grant the holders a political privilege, which consists of having up to 5 votes per share. They have more benefits than ordinary shares, which have only one vote, although they confer the same economic rights in terms of dividends..

Common stock with simple voting rights or common shares

These shares are entitled to the ordinary dividend, the same as for multiple voting shares, but only confer one vote for the election of the company's board of directors. In general, since common shares are the last to receive dividends, they are the riskiest and therefore their market price normally has greater fluctuations.

Preferred or preferred stock

These are shares that may not have voting rights, but normally pay dividends established in advance with a yield limit. However, despite not having political rights, they are the first to collect dividends up to the established limit.

As you can read, it is possible to incorporate partners in many ways and, with good advice, to establish conditions that ensure that the group that manages the company maintains political control of the company, despite sharing the profits.