Common Stock
A type of equity ownership that represents basic ownership shares in a company with voting rights.
Definition
Common stock represents basic ownership in a company and typically comes with voting rights that allow shareholders to influence company decisions. Common stockholders have a claim on company assets and earnings, but this claim comes after preferred stockholders and creditors in case of liquidation.
Rights and Features
Voting Rights
Right to vote on major company decisions
Residual Claims
Share in company's profits and assets
Limited Liability
Personal assets protected from company debts
Real-World Example
Founder Equity: Founders typically receive common stock
A startup founder might receive 8 million shares of common stock, representing 80% ownership before any investment rounds.