Classes of Stock

Corporations issue stock. They class the stock into groupings with each group providing some form ownership rights. Most companies start out with common stock, then issue preferred and treasury stock. As the company matures, common stock is grouped into Class A, Class B etc.

Common Stock – Definition

Common Stock

A document indicating ownership in a corporation is often referred to as common stock.  It identifies an equity position in a business. The document or certificate is commonly referred to as a security and provides certain rights to the holder (owner).  These rights include voting and residual value upon liquidation of the company.

What is an S-Corporation?

S-Corporations

Within the family of corporations, the Internal Revenue Service (IRS) grants tax free status to S-Corporations.  It is strictly an IRS term.  In the IRS code, there are several subchapters pertaining to corporations; Subchapter S identifies and regulates S-Corporations.  In essence, S-Corporations are a pass through entity meaning that all income, losses, credits and special deductions are pass-through to the stockholders of the company.

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