Share Class

Just like sections on an airplane or levels of aristocracy, stocks can come in different classes. They describe different kinds of stocks, with varying rights and voting power. Typically, these classes get assigned letters to distinguish one from another: Class A, Class B, etc.

The exact distinctions between classes differs from company to company. There are no hard rules. However, a sample situation might go like this:

Class A stock has no voting rights, but receives a dividend. Class B stock doesn't receive a dividend, but holders get all the voting rights. This setup would allow original owners to issue themselves all the Class B stock early in the company-creation process. Then they can spread the Class A stock more widely.

In this scenario, owning Class A shares would let you participate in the economic benefits of the company (i.e. getting dividend payments). However, you don't have any say about the direction of the company. That right is reserved for the Class B owners.