If an investor owns one ordinary share of a company, that investor is entitled to one vote on all of that company's major company decisions. These decisions can include mergers and acquisitions.

Ordinary Shares

Ordinary shares, also known as common shares, are equity instruments that represent ownership in a company but are the most subordinated of all equity classes. While the owner of an ordinary share can take part in the profits and potential liquidated assets of a company, the owner is only allowed to receive those benefits after all other types of shares and debts have been paid.

If a company has to liquidate but only has enough money to pay out its preferred shareholders or debt holders, the holders of common shares do not receive any funds. There also may be more than one class of ordinary shares, further creating a waterfall distribution where the lowest ordinary share gets paid last in all scenarios.


Although ordinary shares are the most subordinated share type and get paid out after all debt and other equity holders have been paid, owners of ordinary shares still receive voting rights in company activities.

The ratio of votes to ordinary shares is one-to-one. Even though an owner of ordinary shares might not receive his share of profits or assets, if he owns enough ordinary shares, he has enough power to affect company decisions and corporate governance. The more ordinary shares an investor owns, the greater an impact he will have. Most of the voting on major decisions happens quarterly.