Preferred stock as well as common stock, represents ownership. As the name implies, preferred stock is given some preference over common stock with respect to either assets or dividends. There are many varieties of preferred stock, but generally the term means that the holder has a claim prior to that of the holder of common stock. The claim of a bondholder, however, will be considered ahead of the preferred stockholder. Preferred stock generally does not carry voting privileges.
Stockholders have the right to be informed of the company's financial and business status.
They normally have the right to transfer shares of stock freely. Liability for corporation debt is normally limited to the capital a stockholder has invested in the corporation. As part owners of the enterprise, stockholders have the right to vote in the management of their investment. The holders of common stock in a corporation are generally entitled to cast one vote for each share they own in the election of directors. The owners may appear in person to vote, or may give another person the Power of Attorney, called a proxy.