A non-voting preferred stock cannot vote in which of the following actions?

A non-voting preferred stock cannot vote in which of the following actions?

• A. Filling of vacancy in the board
• B. Amendment of articles of incorporation
• C. Increase or decrease in capital stock
• D. Dissolution of the corporation

Answer: (A)

Non-voting preferred stock is designed not to participate in governance votes. Filling a vacancy on the board is a board-level matter handled by the directors themselves (and only in some cases by shareholders if the bylaws provide). Since non-voting shares don’t vote on director-related decisions, they cannot vote to fill a board vacancy. The other actions listed—amending the articles of incorporation, increasing or decreasing capital stock, and dissolving the corporation—are fundamental corporate actions that require stockholders’ votes. While a class with voting rights would participate, a non-voting class typically still cannot influence the outcome because these actions are governed by shareholder voting rules.

Non-voting preferred stock is designed not to participate in governance votes. Filling a vacancy on the board is a board-level matter handled by the directors themselves (and only in some cases by shareholders if the bylaws provide). Since non-voting shares don’t vote on director-related decisions, they cannot vote to fill a board vacancy. The other actions listed—amending the articles of incorporation, increasing or decreasing capital stock, and dissolving the corporation—are fundamental corporate actions that require stockholders’ votes. While a class with voting rights would participate, a non-voting class typically still cannot influence the outcome because these actions are governed by shareholder voting rules.