How Do You Spell NONVOTING SHARE?
Pronunciation: [nˌɒnvˈə͡ʊtɪŋ ʃˈe͡ə] (IPA) 
Pronunciation: [nˌɒnvˈə͡ʊtɪŋ ʃˈe͡ə] (IPA)
A nonvoting share refers to a type of stock or equity security that carries limited or no voting rights during corporate decision-making processes. When a company issues nonvoting shares, it means that the shareholders who possess such shares do not have the right to vote at shareholder meetings or participate in the election of the company's board of directors. These shares are typically issued to investors or individuals who are seeking ownership in a company's capital structure but do not necessarily want or need a say in its operational or managerial matters.
Nonvoting shares may be issued by companies for various reasons. It allows companies to raise capital from investors without diluting existing shareholders' voting power or control over decision-making. It also enables founders or major shareholders to retain majority control, preventing their influence from being diluted. Nonvoting shares are often found in family-owned businesses, where the family members who hold voting shares maintain control over the company while allowing non-family members to invest in the business.
Although nonvoting shareholders lack voting rights, they may still enjoy certain financial benefits such as dividends and capital gains. They typically receive the same economic benefits as voting shareholders, but without any decision-making power. Nonvoting shares can be bought or sold in the secondary market like traditional shares, and their value may fluctuate based on the company's performance and market conditions.
In summary, nonvoting shares represent an ownership interest in a company without granting the holder voting rights, allowing investors to participate in financial returns while sacrificing voting power in corporate affairs.
The word "nonvoting" is formed by combining the prefix "non-", meaning "not" or "without", with the verb "vote", which refers to the act of expressing one's choice or opinion in a decision-making process. The term "share" in this context refers to a unit or portion of ownership in a company.
The etymology of "nonvoting share" is relatively straightforward. It describes a type of share or ownership in a company that lacks voting rights. These shares typically grant the owner the right to receive dividends or a portion of the company's profits, but they do not give the owner the ability to vote on corporate matters.
The term likely emerged within the corporate and legal context to distinguish this specific type of share from voting shares, where the owners have the right to participate in decision-making processes that affect the company.
