When investors hold shares of a privately held corporation, they are granted certain rights as partial owners of the company. While state corporation laws must be adhered to, private corporations’ articles of incorporation and bylaws can grant and govern many of these shareholder rights, including voting rights.

A transportation attorney in Lake County understands that voting rights are shareholders’ greatest tool for creating change within a corporation.

What are stock voting rights?

Individuals or businesses who own one or more shares of a corporation may have the right to be an integral part of the decision-making process through voting on key corporate issues.  However, the day-to-day management of the company is usually not up for discussion or a vote.

Common stock shareholder rights

At shareholder meetings, the board of directors usually presents any pending resolutions that involve major matters, such as changes to charters. Shareholders may be allowed to vote on the following:

• Policy matters
• Elections for members of the board of directors
• Whether or not to issue additional stock

A transportation attorney in Lake County usually sees these rights granted for ordinary shares, or common stock, and other special classes of stock.

Eligibility

Common stock shares are usually each assigned a single vote. Those who own more than one share of the common stock are given a vote for every share they control. Shareholders with other classes of stock can be given more or fewer voting rights. Preferred stock shareholders are given payment priority over common stock shareholders, but they are usually not allowed to vote at shareholder meetings no matter how many shares they control. In some companies, they may only have the right to vote when their dividends go unpaid for a certain amount of time. Another special class of stock, or Class A stock, can give shareholders multiple votes per share. These shares are often reserved for the founders of the company.

Illinois law

Illinois law grants shareholders voting rights in person or by proxy. If shareholders cannot be present at any meeting of the shareholders, they may choose to have another individual control their votes for their shares. However, the votes of the proxy cannot be undone, so choosing the proper proxy is of utmost importance for voters who wish for their voices to be heard and actively shape the company.

Assigning shareholder rights for a corporation often requires a full understanding of Illinois law and the desires of all founding members, as well as a clear view of the company’s future. Corporations who need assistance with assigning voting rights to shares should contact a transportation attorney in Lake County without delay.