what is common stock?

Common stock is a type of security that represents ownership in a corporation.

Common stock, also known as ordinary shares or equity shares, is a type of security that represents ownership in a corporation. When an individual or entity purchases common stock, they become a part-owner of the company and have the right to vote on certain matters at annual shareholder meetings. Common stockholders also have the potential to earn a return on their investment through dividends and capital appreciation.

One of the key characteristics of common stock is that it carries with it a residual claim on the company's assets and earnings. This means that in the event of liquidation or bankruptcy, common stockholders are the last in line to receive any remaining assets after all debts and obligations have been paid. As a result, common stock is considered a higher-risk investment compared to other types of securities such as bonds or preferred stock.

Common stockholders also have the right to vote on important matters that affect the company's operations and future direction. This can include electing members to the board of directors, approving mergers or acquisitions, or making changes to the company's bylaws. The number of votes each common stockholder has is typically determined by the number of shares they own. Shareholders with more shares have more voting power.
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In addition to voting rights, common stockholders also have the potential to earn a return on their investment through dividends and capital appreciation. Dividends are typically paid out of a company's profits and are distributed to shareholders on a per-share basis. Capital appreciation refers to an increase in the price of the stock over time. If an investor purchases common stock at a certain price and sells it at a higher price, they can realize a capital gain.

Overall, common stock is an important investment vehicle that allows individuals and entities to become owners in publicly traded companies. It provides shareholders with voting rights, and the potential for dividends and capital appreciation, but also carries higher risk compared to other types of securities.

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timothy l. miles, esq.

Nashville attorney Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Mr. Miles has dedicated his career to representing shareholders, employees, and consumers in complex class-action litigation. Whether serving as lead, co-lead, or liaison counsel, Mr. Miles has helped recover hundreds of millions of dollars for defrauded investors,  shaped precedent-setting decisions, and delivered real corporate governance reforms. Judges and peers have repeatedly recognized Mr. Miles’ relentless advocacy for the underdog, as well as his unbendable ethical standards. Mr. Miles was recently selected by Martindale-Hubbell® and ALM as a 2022 Top Ranked Lawyer, 2022 Top Rated Litigator. and a 2022 Elite Lawyer of the South. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association,​Class Action:  Class Action: Top National Trial Lawyers, National Trial Lawyers Association (2023), a superb rated attorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019); a Top Rated Litigator by Martindale-Hubbell® and ALM  (2019-2022); America’s Most Honored Lawyers 2020 – Top 1% by America’s Most Honored (2020-2022).  Mr. Miles has published over sixty articles on various issues of the law, including class actions, whistleblower cases, products liability, civil procedure, derivative actions, corporate takeover litigation, corporate formation, mass torts, dangerous drugs, and more.  Please visit our website or call for free anytime.

CONTACT                                                      
The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
​300 Centerview Dr., #247
Brentwood, TN 37027
​​Phone: (855) 846-6529
​Email: [email protected]