Common stock designated by the publicly-traded company issuing it as having fewer voting rights than other common stocks. This gives a shareholder of limited-voting stock less control over the company than he/she would otherwise have. For example, a company can designate its limited-voting stock as having half a vote and its regular common stock as having one vote. Limited-voting stock is beneficial for the board of directors and the company's management, as it allows the company to raise financing from limited-voting stockholders while giving them less control over the company. See also: Supervoting stock, Golden share.
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A class of stock that provides its holders with smaller than proportionate voting rights in comparison with another class of stock issued by the same firm. Limited-voting shares allow another class of stock effectively to control the election of a firm's directors even though the limited-voting shareholders may have contributed a majority of the firm's equity capital. Compare supervoting stock.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.