{"id":2292,"date":"2019-08-12T05:46:18","date_gmt":"2019-08-12T05:46:18","guid":{"rendered":"https:\/\/commerceiets.com\/?p=2292"},"modified":"2019-08-12T05:46:18","modified_gmt":"2019-08-12T05:46:18","slug":"equity-and-preference-shares","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/equity-and-preference-shares\/","title":{"rendered":"EQUITY AND PREFERENCE SHARES"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_71 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/equity-and-preference-shares\/#EQUITY_SHARES\" title=\"EQUITY SHARES\">EQUITY SHARES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/equity-and-preference-shares\/#PREFERENCE_SHARES\" title=\"PREFERENCE SHARES\">PREFERENCE SHARES<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/equity-and-preference-shares\/#DIFFERENCE_BETWEEN_EQUITY_AND_PREFERENCE_SHARES\" title=\"DIFFERENCE BETWEEN EQUITY AND PREFERENCE SHARES\">DIFFERENCE BETWEEN EQUITY AND PREFERENCE SHARES<\/a><\/li><\/ul><\/nav><\/div>\n<h4 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"EQUITY_SHARES\"><\/span>EQUITY SHARES<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Equity Shares are those shares which are paid dividends only when profits are left after the preference shareholders have been paid fixed rate of dividends. In other words, there will be no fixed rate of dividend on the equity shares. Equity shareholders have voting rights and control of the affairs of the <a href=\"https:\/\/commerceiets.com\/joint-stock-company\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"company. (opens in a new tab)\">company.<\/a><\/p>\n\n\n\n<h4 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"PREFERENCE_SHARES\"><\/span>PREFERENCE SHARES<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\"><a href=\"https:\/\/commerceiets.com\/different-types-of-preference-shares\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Preference shares (opens in a new tab)\">Preference shares<\/a> are those which carry the following two preferential rights:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>They have a right to receive dividend at a fixed\nrate before any dividend is paid on the equity shares.<\/li><li>When the company is wound up, they have a right\nto the return of capital before that of equity shares.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">Also, the preference shares may carry some more rights such\nas the right to participate in excess profits when a specified dividend has\nbeen paid on the equity shares or the right to receive a premium at the time of\nredemption. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"DIFFERENCE_BETWEEN_EQUITY_AND_PREFERENCE_SHARES\"><\/span>DIFFERENCE BETWEEN EQUITY AND PREFERENCE SHARES<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td><strong>   BASIS OF DIFFERENCE   <\/strong><\/td><td><strong>   PREFERENCE SHARES   <\/strong><\/td><td><strong>   EQUITY SHARES   <\/strong><\/td><\/tr><tr><td><strong>   RIGHT TO DIVIDEND   <\/strong><\/td><td>\n  Dividend is paid on Preference shares before it is paid on the Equity\n  shares.\n  <\/td><td>\n  Dividend is paid on the equity shares after it is paid on the\n  preference shares.\n  <\/td><\/tr><tr><td><strong>   RATE OF DIVIDEND   <\/strong><\/td><td>\n  Rate of dividend may be fixed on these shares.\n  <\/td><td>\n  Rate of dividend is proposed by the Board of Directors each year.\n  <\/td><\/tr><tr><td><strong>   ARREARS OF DIVIDEND   <\/strong><\/td><td>\n  If Preference shares are Cumulative Preference Shares, the dividend\n  gets accumulated and will be paid before any payment of dividend to equity\n  shareholders.\n  <\/td><td>\n  Dividend is declared every year. In case, dividend is not declared\n  during the year, it is not accumulated to be paid in the coming years.\n  <\/td><\/tr><tr><td><strong>   CONVERTIBILITY   <\/strong><\/td><td>\n  Preference shares may be converted into equity shares, if the terms\n  of issue so provide.\n  <\/td><td>\n  Equity shares are not convertible.\n  <\/td><\/tr><tr><td><strong>   REDEMPTION   <\/strong><\/td><td>\n  Preference shares are redeemed on due date.\n  <\/td><td>\n  A company may buy-back its equity shares.\n  <\/td><\/tr><tr><td><strong>   VOTING RIGHTS   <\/strong><\/td><td>\n  Preference shareholders have voting rights only in special\n  circumstances.\n  <\/td><td>\n  Equity shareholders have voting rights in all circumstances.\n  <\/td><\/tr><tr><td><strong>   REFUND OF CAPITAL   <\/strong><\/td><td>\n  In case of winding up of the company, the preference share capital is\n  repaid before the equity share capital is paid.\n  <\/td><td>\n  In case of winding up of the company, the equity share capital is\n  repaid after the preference share capital is paid.\n  <\/td><\/tr><tr><td><strong>   PARTICIPATION IN MANAGEMENT   <\/strong><\/td><td>\n  Preference shareholders do not have a right to participate in the\n  management of the company.\n  <\/td><td>\n  Equity shareholders have a right to participate in the management of\n  the company.\n  <\/td><\/tr><tr><td><strong>   REQUIREMENT FOR FORMATION   <\/strong><\/td><td>\n  A new company cannot be formed only with preference shares.\n  <\/td><td>\n  A new company can be formed only with the equity shares.\n  <\/td><\/tr><tr><td><strong>   TYPES   <\/strong><\/td><td>\n  There are 8 types of preference shares.\n  <\/td><td>\n  There is no such type of equity shares, however sweat equity shares\n  are covered under this category.\n  <\/td><\/tr><\/tbody><\/table>\n","protected":false},"excerpt":{"rendered":"<p>EQUITY SHARES Equity Shares are those shares which are paid dividends only when profits are left after the preference shareholders have been paid fixed rate of dividends. In other words, there will be no fixed rate of dividend on the equity shares. Equity shareholders have voting rights and control of the affairs of the company&#8230;.<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/equity-and-preference-shares\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;EQUITY AND PREFERENCE SHARES&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":2296,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,102,56],"tags":[129,130,128],"class_list":["post-2292","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-12-accountancy","category-corporate-accounting","category-difference-between","tag-difference-between-equity-and-preference-shares","tag-equity-shares","tag-preference-shares"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2292","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=2292"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2292\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/2296"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=2292"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=2292"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=2292"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}