Preference shares carry preferential rights over equity shares with regards to dividend payments and return of capital. There are various kinds of preference shares: Cumulative preference shares entitle holders to recover any unpaid dividends before equity holders are paid, while non-cumulative shares do not accumulate unpaid dividends. Redeemable shares can be redeemed by the company within its lifetime under certain conditions, while irredeemable shares can only be redeemed upon winding up. Participating shares entitle holders to a share of surplus profits distributed to equity holders, while non-participating shares only receive the fixed dividend rate. Convertible preference shares can be converted into equity shares, while non-convertible shares lack this right.