Legal & Compliance
Voting Rights
The rights of shareholders to vote on major company decisions — common shareholders typically vote on general matters, while preferred shareholders have special protective votes.
Voting rights determine which shareholders have a say in company decisions and on what matters. In a typical VC-backed startup: common shareholders (founders, employees) vote on general corporate matters — electing directors, approving charter amendments, and ratifying major transactions. Preferred shareholders vote on their own matters through protective provisions — new equity issuances, charter amendments affecting preferred rights, and sometimes M&A. Board seats give directors the ability to vote on day-to-day management matters (hiring executives, approving budgets). Drag-along provisions can override minority shareholder votes in M&A. Dual-class stock structures (common in founder-controlled public companies like Google and Meta) give founders supervoting shares — often 10 votes per share vs. 1 vote for other shareholders.