Do all shareholders have the same voting rights?

Not necessarily. Under the law of England and Wales, the voting rights attached to specific shares generally depend upon the content of a company’s articles of association and any shareholders’ agreement.

It is possible to create different types, classes and amounts of shares — and for shares to have different voting and other rights, such as a right to receive a dividend.

Voting rights and other matters relating to shares relevant to company shareholders are set out in The Companies Act 2006.

The vast majority of shares are created as ‘ordinary’ shares and carry a right of one vote per share. 

Voting rights for shareholders are usually in proportion to the number of shares owned as a percentage of the total issued (and paid for) as equity share capital of the company. Such shareholders are called equity shareholders and have a right to vote attached to their shareholding.

There can be other classes of shares issued depending on the company structure. Some shares may have no voting rights or restricted rights — where shareholders can only vote in certain circumstances.

In certain circumstances, shares can have additional or enhanced voting rights per individual share, where each share can carry several votes. Voting rights are typically governed by, set out and defined within the company’s articles of association. 

A preference shareholder is a different class of shareholder. Preference shareholders are guaranteed a fixed dividend rate and come ahead in the line before equity shareholders, but they do not have any voting rights.

The voting rights attached to shares are usually voting rights at general company meetings. Voting at general meetings is typically decided by a show of hands — one vote per shareholder, regardless of the number of shares held, but as outlined above, that isn’t always the case.For the above reasons, it is necessary to review the articles and shares issued and held before confirming a shareholder’s rights.