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How many votes is each share holder entitled to when voting on a merger?

Los Angeles, CA |

If you can give me an example with MetroPCS

Attorney Answers 2

Posted

It depends in the terms of the shares. As a *very* general rule, each shareholder gets 1 vote per share. If you own 100 shares, you get 100 votes -- and if you own 10 million shares, you get 10 million votes.

But there are companies, including Facebook and Comcast, that are set up to give the founders super-control. So Mark Zuckerberg gets a lot more than 1 vote per share, and he never has to worry about getting out-voted by Facebook's stockholders.

If it's a public company, you should be able to find the exact answer in its filings with the SEC. Look for a section called, "Description of Securities" or "Description of Shares."

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Asker

Posted

In which form do I look for Description of Securities" or "Description of Shares."?

David Lynn Morehous

David Lynn Morehous

Posted

The best forms are S-3 and S-1. If the company's filed a Form 10 - not 10-K or 10-Q - that will have it, too (but Form 10s are usually filed by very small companies that aren't on Nasdaq or NYSE). You may find it in the last proxy statement for the annual meeting - look for "DEF14A."

Posted

In a corporation, the voting rights are usually set forth in the bylaws. There may be multiple classes of shares, some common, some preferred, and it is permitted that different classes of shares may have different that 1:1 voting rights per unit.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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