Are There Different Types Of Shares?
Yes, there are two basic kinds of shares: A. Ordinary Shares Also known as common stock. As a part of the percentage ownership described earlier, the ordinary shareholder or common stockholder usually has four basic rights in proportion to the number of shares owned: • The right to receive dividends if and when these are declared by the Board of Directors. It is possible that the shareholders may not receive any dividends if the company performs poorly. • The right to a vote at meetings of the shareholders. • The right to claim a portion of the companys undivided assets, if the company is liquidated. • The right to subscribe to additional stock or share offerings before they are made available to the general public. This is known as a pre-emptive right. B. Preference shares Also called preferred shares or stocks. The holders of these shares have certain rights and privileges over ordinary shareholders. There are different classes of preferred shares, which confer different rights. The
