A corporation divides its ownership units into shares, and can issue more than one type or class of shares. The articles of incorporation must state the type or types and the number of shares that can be issued. A corporation may offer additional shares once it has begun operating, sometimes subject to current shareholders' preemptive rights to buy new shares in proportion to their current ownership. Directors usually determine the price of shares. Some states require corporations to assign a nominal or minimum value to shares, called a par value, although many states are eliminating this practice.
Many states allow some types of noncash property to be exchanged for shares.
If a corporation issues only one type of share, its shares are called common stock or common shares. Holders of common stock typically have the power to vote and a right to their share of the corporation's net assets. Statutes allow corporations to create different classes of common stock, with varying voting power and dividend rights. A corporation also may issue preferred shares. These are typically nonvoting shares, and their holders receive a preference over holders of common shares for payment of dividends or liquidations.