Shareholders Equity

Shareholders’ equity is listed on a corporation’s balance sheet and measures its net worth. A corporation’s shareholders’ equity is calculated by subtracting a company’s total liabilities from its total assets, which are also listed on a corporation’s balance sheet.

Shareholders’ equity is the value of a corporation which is the property of its ordinary shareholders. A corporation is owned by its shareholders.

In our sample class A, B, C and D share structure, a corporation is generally controlled by its Class A shareholders. Employee shareholder equity may be granted as Class B shares, to avoid tax consequences, but they will not be able to vote at shareholder meetings. Passive equity investors are usually class C and D shareholders. Class D shareholders get paid dividends before shareholders of class A, B, and C shares, but their dividend is not cumulative if the corporation does not turn a profit in a given year.