Types of shares

Shares can be classified into two categories

  • Equity Shares
  • Preference Shares

Equity share: Equity share are those shares, which do not enjoy any preferential right in respect of dividend or repayment of capital. Dividend on these shares is paid at a rate recommended by the directors and declared by the company in general meeting. An equity share represents ownership capital. Equity shareholders collectively own the company.

Preference Shares: Preference Shares are those shares which gives their holders an entitlement to a fixed dividend but which do not usually carry voting rights. Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Preference shares pay a fixed dividend that does not fluctuate

Types of Preference Shares

  • Cumulative Preference Shares 
  • Non-cumulative Preference Shares
  • Participating Preference Share
  • Non-participating Preference Share
  • Redeemable Preference Share
  • Irredeemable Preference Share
  • Convertible Preference Share
  • Non-convertible Preference Share

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