A non-voting share is a share in the capital of a company which belongs to a class that has no voting rights. This is distinct from, for example, an ordinary share which gives the shareholder standard rights to vote at shareholder meetings in proportion to their shareholding. Upon the issuing of shares to a shareholder, the class of shares will be specified on the subscription documents and share certificate.
The company constitution is the document which sets out the different classes of shares a company can offer and what rights and restrictions attach to each different class. The name of the class can differ across companies, e.g. Class [X], Non-Voting. To understand the exact restrictions which come with the class, an incoming shareholder should review the company’s constitution.
A company may issue employees with non-voting shares because they want them to be able to benefit from dividends or distribution of profits from a sale but do not want them to participate in decision making.
Answered by Madeleine Hunt
Madeleine is a Lawyer in LegalVision’s Business Structuring and Capital Raising teams. Before joining LegalVision, Madeleine was an Assistant Policy Officer for the NSW Department of Premier and Cabinet and a Legal Officer at the Arts Law Centre of Australia. Madeleine has assisted a large number of Australian startups with their legal needs. She provides end-to-end guidance for companies as they scale, from choosing the right corporate structure to deciding on funding options.
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