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In finance, a share class or share classification are different types of shares in company share capital that have different levels of voting rights. For example, a company might create two classes of shares class A share and a class B share where the class A shares have fewer rights than class B shareholders. This may be done to maintain control of a company by a group of shareholders or to make a company more difficult to take over.^[1]

For example, a company may create preferred stock as a poison pill that so that all shareholders of common stock cannot agree to a merger or takeover plan.

There is no statutory procedure for converting shares from one class to another. It may be done with the consent of all the shareholders affected. The safest course is to pass a resolution to which all the shareholders consent because, in practice, changing the rights on one person’s shares may well have an effect, at least in practice on the rights of all the other shareholders.^[2]

Meta Platforms (formerly Facebook), Google’s parent Alphabet, Berkshire Hathaway and SpaceX have a two-class structure of its stock shares, consisting of Class A and Class B shares.^[3]

Reuters reported:

A 2024 study published in the Harvard Law School Forum on Corporate Governance showed that on average companies in the Russell 3000 index (.RUA) with dual or multi-class share structures outperformed those with a single share class, over five and 10-year periods. However, a separate paper from the European Corporate Governance ​Institute found that the valuation ​premium enjoyed by dual-class ⁠firms tends to diminish over time, with such companies trading at a discount to their single-class peers roughly seven to nine years after their IPOs.^[3]

Companies can have the following classes:^[4]

• Ordinary shares
• Preference shares
• Non-voting stock
• Redeemable shares
• Convertible shares
• Deferred shares

• Partly paid
• Phantom stock
• Restricted stock
• Shareholder
• Stock option