What type of shares provide owners voting rights but only residual claims to the firm's assets?

Common shares are the type of shares that grant their owners voting rights along with residual claims to the firm's assets. This means that shareholders can participate in key corporate decisions, such as electing the board of directors or approving significant business changes, which reflects their ability to influence the management and strategic direction of the company.

In addition to voting rights, common shareholders have the right to a portion of the company's assets, but this claim is considered residual because they can only claim what is left after all other obligations, such as debts and preferred shareholder claims, have been satisfied in the event of liquidation. This characteristic is essential in understanding the position of common shareholders in the capital structure of a firm, where they take on more risk in exchange for potential higher returns, particularly through capital appreciation and dividends.

Preferred shares, in contrast, generally do not provide voting rights and have a fixed dividend obligation that must be paid before any dividends are distributed to common shareholders. Franchise shares are not a common term within the context of financial management and do not represent a recognized class of equity. Sole proprietorship shares do not exist in the same form as a corporate structure, as this entity type does not issue shares. Thus, the distinctive features of common shares accurately align with the question regarding voting