Common stock is a form of corporate equity ownership, a type of s

ecurity. The terms voting share and ordinary share are also used fr
equently in other parts of the world; "common stock" being primaril
y used in the United States. They are known as Equity shares or O
rdinary shares in the UK and other Commonwealthrealms. This type
of share gives the stockholder the right to share in the profits of th
e company, and to vote on matters of corporate policy and the com
position of the members of the board of directors.
It is called "common" to distinguish it from preferred stock. If both
types of stock exist, common/equity stockholders usually cannot be
paid dividends until all preferred/preference stock dividends are pai
d in full; it is possible to have common stock that has dividends th
at are paid alongside the preferred stock.
In the event of bankruptcy, common stock investors receive any rem
aining funds after bondholders, creditors (including employees), and
preferred stockholders are paid. As such, common stock investors of
ten receive nothing after a liquidation bankruptcy Chapter 7.
Common stockholders can also earn money through capitalappreciati
on. Common shares may perform better than preferred shares or bo
nds over time, in part to accommodate the increased risk.

Shareholder rights

Shareholder rights are more conceptual than technical or factual. Th

eir most common source is in the statutory and case law of the juri
sdiction in which the company was formed. Information about what
people think of as shareholder rights can also be found in the corpo
rate charter and governance documents, but companies do not actua
lly have documentation outlining specific "Shareholder Rights". Some
shareholders elect to enter into shareholder agreements that create
new rights among the shareholders, and it is common for the comp
any to be a party to that agreement.[citation needed]
Some common stock shares have voting rights on certain matters, su
ch as electing the board of directors. However, in the United States,
a company can have both a "voting" and "non-voting" series of com
mon stock, as with preferred stock, but not in countries which have
laws against multiple voting and non-voting shares
Hypothetically speaking, holders of voting common stock can influe
nce the corporation through votes on establishing corporate objective
s and policy, stock splits, and electing the company's board of direct
ors. In practice, it's questionable whether or not such actions can be
organized or ruled in their favor. Some shareholders, including hold
ers of common stock, also receive preemptive rights, which enable t
hem to retain their proportional ownership in a company if it issues
additional stock or other securities. There is no fixed dividend paid
out to common/equity stockholders and so their returns are uncerta
in, contingent on earnings, company reinvestment, and efficiency of
the market to value and sell stock.[2]