Share Classes in Australia 2025: Types, Benefits & Investor Impact

If you’ve ever wondered why some shares offer more voting power or higher dividends than others, the answer often lies in share classes. In 2025, understanding the nuances of share class structures is more critical than ever for Australian investors — whether you’re buying into a listed company or a fast-growing startup. Recent regulatory tweaks and shifting investor priorities have put the spotlight on how companies structure their equity, making it vital to know what you’re really buying when you pick up shares.

What Are Share Classes?

Share classes refer to different types of shares that a company issues, each with its own set of rights and privileges. While the concept might sound technical, the impact is real: your class of shares determines your say in company decisions, your share of profits, and sometimes, your tax bill.

• Ordinary shares: The most common class, usually offering one vote per share and the right to dividends.
• Preference shares: Provide priority for dividends (and sometimes capital returns), often with limited or no voting rights.
• Dual-class shares: Increasingly popular in tech and high-growth companies, these allow founders and insiders to retain control via special voting rights.
• Redeemable, partly paid, and other hybrids: Each with their own quirks and uses, especially in private equity and venture capital deals.

Why Share Classes Matter: Voting, Dividends & Tax

For many Australians, the most visible impact of share classes is in voting rights and dividend access. Take the example of Xero, which listed on the ASX with only one class of ordinary shares, giving all investors equal footing. In contrast, companies like WiseTech Global have issued performance shares to executives, which convert into ordinary shares if targets are met — a structure common in today’s incentive-heavy corporate landscape.

In 2025, ASIC has signalled closer scrutiny of dual-class structures, particularly after several high-profile listings in the tech sector where founders retained outsized control. The debate isn’t just academic: owning shares with fewer votes could mean having less influence over mergers, board appointments, and even takeover offers.

Dividend rights are also directly affected. Preference shares often promise a fixed dividend, which can appeal to income-focused investors, but may miss out on the growth upside if the company booms. Tax treatment varies too: franked dividends paid on ordinary shares may offer more tax efficiency compared to some preference share structures, depending on how the company distributes profits in 2025.

2025 Trends: Regulatory Updates and Real-World Examples

This year, the Australian Securities Exchange (ASX) has updated its listing rules to require clearer disclosure of share class structures. Companies must now provide plain-English summaries of voting, dividend, and conversion rights in prospectuses and annual reports. This change aims to protect retail investors who may have previously missed the fine print.

Unlisted companies are also in focus. The government’s recent incentives for employee share schemes have prompted more startups to issue multiple share classes — for example, reserving non-voting shares for staff while giving founders ‘golden shares’ with enhanced rights. This has led to more Australians holding shares with unique terms, especially as equity-based remuneration grows in popularity.

• Case in point: Canva, now Australia’s most valuable private tech company, uses a dual-class structure to balance founder control with investor interests.
• Market Watch: Several 2025 IPOs, such as AI platform Hivemind, have drawn headlines for issuing Class B shares with 10x the voting power of ordinary shares, sparking debate over investor fairness.

Investors should also watch for changes in the treatment of hybrid securities, as the Australian Taxation Office (ATO) is reviewing the classification of certain preference shares for franking credit eligibility in 2025.

How to Choose the Right Share Class for Your Portfolio

Not all share classes are created equal — and choosing the wrong one can limit your returns or leave you without a voice when it counts. Here’s how to approach the decision:

• Read the fine print: Always check the rights attached to any share before buying, especially in IPOs or private placements.
• Consider your goals: Are you seeking income, long-term growth, or influence in the company? Ordinary shares may suit growth investors, while preference shares can offer stability.
• Stay updated: New rules in 2025 make it easier to understand share class disclosures — use these to your advantage, especially as companies innovate with new structures.
• Watch for liquidity: Some share classes are less liquid or harder to sell, particularly in unlisted companies.

Ultimately, understanding share classes isn’t just for corporate lawyers — it’s a key skill for any Australian looking to build wealth through equities in 2025 and beyond.