Final answer:
Stockholders in a conventional or S corporation can freely transfer their shares, which allows them to participate in the trading of these shares on the stock market and influence the company by voting for the board of directors.
Step-by-step explanation:
Unlike an LLC, conventional and S corporations' stockholders can transfer their shares as they wish. This means shareholders of S corporations have the freedom to buy, sell, hold, or transfer their stock without the restrictions typically associated with shares in an LLC.
Stocks represent firm ownership and exist in terms of shares, particularly for public companies where financial investors can freely trade these shares on the stock market. Owning more stock provides the shareholder with additional votes that can be used to influence the direction of the company through the election of its board of directors. Thus, the flexibility of share transferability is crucial for investors in public companies.