Classified Shares

DEFINITION of 'Classified Shares'

The separation of company equity into more than one class of common shares, usually called "Class A" and "Class B."

Also known as "classified stock".

BREAKING DOWN 'Classified Shares'

The specific features of each class are set out in the corporate charter and bylaws. Voting privileges are the main reason companies create different classes, although liquidation and dividend rights may also be involved.