Definition for: Classified Shares
The term "classified shares" refers to the categorization of company stock into more than one class of common shares, usually called "Class A" and "Class B." The main reason of companies to create different classes is to assign different voting privileges, liquidation and/or dividend rights. For example, Class A shares may have voting rights equal to 10 times the voting rights of the Class B shares. Classified shares are also referred to as "classified stock." The terms of the classified shares are typically set forth in the company's charter.
