Shares are equity units of ownership in a corporation. Learn the types of shares in a business.

1. TYPES OF SHARES
IN A BUSINESS

2. WHAT ARE SHARES?
01
04
02
Shares are equity units
of ownership in a
corporation
03
Stock shareholders who pay no
dividends don't participate in
the distribution of the profits
If declared in the form of dividends,
for some companies, shares exist as a
financial asset providing for an equal
distribution of any residual profits
But they can anticipate participating
in stock growth prices as the
company increases profits

3. Companies issue shares to raise money for
their operations fund
These shares represent and entitle the holder
to a company ownership stake
By purchasing shares, the shareholder has a
certain amount of rights
FUNDING OWNERSHIP RIGHTS
WHY DO COMPANIES
ISSUE SHARES?

4. TYPES OF SHARES
Equity or Common Share Capital
Preference Share Capital
1.
2. EQUITY OR
COMMON
SHARE CAPITAL
PREFERENCE
SHARE CAPITAL
Cumulative Preference Shares
Non-cumulative Preference Shares
Participating Preference Shares
Non-participating Preference Shares
Convertible Preference Shares
Non-convertible Preference Shares
Redeemable Preference Shares
Irredeemable Preference Shares

5. Also known as ‘ordinary shares’
Equity shares are one of the most common
types of shares
They have high value and impart various rights
like dividends, voting, and more for the
shareholders
EQUITY OR COMMON
SHARE CAPITAL

6. During the company's liquidation, the
shareholders with preferential shares are paid
out after settling the debts to the creditors
But, preference shareholders don't have any
voting rights
Most types of preference shares are based on
maturity terms, structure, nature of dividend
payment, and more. Some are the following:
PREFERENCE SHARE
CAPITAL

7. CUMULATIVE
PREFERENCE SHARES
Arrears or dues will be received
in subsequent years
When there is inadequate profit,
shareholders won't lose
anything
The fixed rate for the dividend is
guaranteed
NON-CUMULATIVE
PREFERENCE SHARES
When there is inadequate profit,
companies won't lose anything
The fixed rate of dividends is
guaranteed
PARTICIPATING
PREFERENCE SHARES
Entitled to share the surplus
profit
The fixed rate of dividends is
guaranteed
NON-PARTICIPATING
PREFERENCE SHARES
Doesn't share the surplus profit
The fixed rate of dividends is
guaranteed

8. CONVERTIBLE
PREFERENCE SHARES
The shares can be converted
into equity shares within a
particular time
NON-CONVERTIBLE
PREFERENCE SHARES
The shares cannot be converted
into Equity shares
REDEEMABLE
PREFERENCE SHARES
Companies might repay the
shares after a fixed period or
earlier
IRREDEEMABLE
PREFERENCE SHARES
Shares are only repayable
during winding up
And the shares don't carry
redemption arrangement

9. Reach out to an expert team of Eqvista if
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