Types of Shares

Types of Shares 5.
Common Shares
- They come with complete voting rights and
1. Par value share Can be issued with or without a par value.
- These shares that have face or nominal
value in the certificate of stock - Common shareholders can vote on
- There’s no minimum or maximum par value important company matters.
2. No Par value share

- do not have a specified face or nominal 6. Preferred shares of stock
value but it has minimum issued value of at - Shares that provide certain advantages,
least 5.00 pesos per share most common forms
1. Preferred shares as to assets – in case
- It is deemed fully paid and non-assessable of liquidation
(the holder won’t owe any additional money 2. Preferred Shares as to Dividend- These
to the company or its creditors.) shares get their dividends before
common shares do, but dividends are
not guaranteed. The amount or rate of
- All the money received from issuing no par these dividends is determined when the
value shares is treated as capital and shall shares are issued.
not be available for distribution as
dividends. - These shares have a stated par value.
- They may have limited or no voting rights.
3. Voting Shares:
- Shares with complete voting rights, typically 7. Founders' Shares
associated with common shares. - Shares issued to the founders of the
corporation, potentially with special rights
Stock Corporation: and privileges.
Common Shareholders: Full voting rights on major
company decisions. - May grant founders the exclusive right to
vote and be voted for in the election of
Preferred Shareholders: Limited or no voting rights, directors. This is limited to a maximum of
but may vote on significant issues. five years from the date of incorporation.
Non-voting Shares: No voting rights on routine
8. Redeemable Shares:
matters, but can vote on crucial issues like
- It may be issued by the corporation when
amendments, mergers, and dissolution.
expressly provided in the articles of
incorporation
Non-Stock Corporation:
Members: Each member typically has one vote.
- These shares can be repurchased or
"redeemed" by the corporation from the
Voting: Members vote on important organizational
shareholders, within a fixed period,
matters, similar to shareholders in a stock
regardless of the existence of
corporation but without shares of stock.
unrestricted retained earnings in the
books of corporation.
4. Non-voting shares
- Shares that have limited or no voting rights,
9. Treasury shares
often associated with preferred and
- shares of stock which have been issued and
redeemable shares.
fully paid for, but subsequently reacquired
by the issuing corporation through
- These shareholders generally do not have
purchase, redemption, donation, or some
the right to vote on routine corporate
other lawful means.
matters.
- They have no voting rights and may be
- However, they are entitled to vote on certain
issued below par value as long as
significant issues, which are crucial to the
reasonable under the circumstance.
company's operations.
- May only be acquired with the presence of
Specific Matters Non-voting Shares Can Vote On
unrestricted retained earnings.
(ASIMID):
1) Amendment of the articles of incorporation
2) Adoption and amendment of bylaws 10. Other shares
3) Sale, lease, exchange, mortgage, pledge, or - corporation may further classify its shares
other disposition of all or substantially all of the for the purpose of ensuring compliance with
corporate property constitutional or legal requirements
4) Incurring, creating, or increasing bonded
indebtedness
5) Increase or decrease of authorized capital stock
6) Merger or consolidation of the corporation with
another corporation or other corporations
7) Investment of corporate funds in another
corporation or business
8) Dissolution of the corporation
Articles of Incorporation
1. It constitute the charter or fundamental law

of the corporation
2. It is executed before incorporation
3. It is condition precedent in the acquisition of

corporate existence
4. It is amended by:
 Majority of Bod/trustees and
 Stockholders representing 2/3 of
outstanding capital stock or
 2/3 of the members in case of non-
stock corporation
5. The power to amend or repeal the articles of

incorporation cannot be delegated by the
stockholders or members to the
bod/trustees
By-laws
1. It is the rules and regulations adopted by

the corporation
2. It is executed before or after incorporation
3. It is condition subsequent. Its absence

merely furnishes a ground for the revocation
of the franchise or certificate of registration
4. It may be amended by:

 a majority vote of BOD and
 Majority of outstanding capital stock
or
 Majority of the member in a non-
stock corporation
5. The power to amend or repeal bylaws- or

adopt new bylaws may be delegated by the:
 2/3 of the outstanding capital stock
or
 2/3 of the members in case of non-
stock corporation

Types of Shares

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Types of Shares 5.

2. No Par value share

1. It constitute the charter or fundamental law

2. It is executed before incorporation

3. It is condition precedent in the acquisition of

5. The power to amend or repeal the articles of

1. It is the rules and regulations adopted by

2. It is executed before or after incorporation

3. It is condition subsequent. Its absence

4. It may be amended by:

5. The power to amend or repeal bylaws- or

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