Posted in Finance, Accounting and Economics Terms, Total Reads: 307
Definition: Class B Shares
Class B shares are one of the two type of shares given out by companies. Class B type of share are primarily dependent on the company itself whereas class A shares, will be for public (common stock). These classes also different in the amount, and the broker fees as well.
The main difference between class A shares and class B shares is the voting rights associated with them. The voting capacity of the shareholder is the major point of difference between the two types. However, in some cases, class A shares might have more voting rights than class B shares and vice versa.
Closely owned family business’ can use dual-class shares issue to raise equity while not diluting the control. Ford family has 40% of shareholder voting power with only 4% of total equity in the company.
Class B shares are not charged on the basis of sales. Also, annual expenses of class A shared would be lesser than class B shares. Disposing of class B shares would also require a certain fee for sale.