This page has general information on types of shares and the rights and interests attached to them.
Types of shares
This table describes types of shares and the rights and interests attached to them.
Item | Description |
1 | Ordinary Gives holders the right to participate in dividends (and capital if the company is liquidated). Usually carries entitlement to vote at general meetings (unless prohibited by Articles for certain classes of ordinary shares). |
2 | Preference Gives holders a right to fixed amounts of dividends (and capital if company is liquidated) before any payments are made to ordinary shareholders. Usually carries no entitlement to vote at general meetings. |
3 | Convertible preference Provides holders with the option to convert to ordinary shares in a specified ratio on or before a specified date. |
4 | Cumulative preference Allows holders to accumulate unpaid dividends from any one year, so that they get paid when the company makes enough profits. (Ordinary shareholders cannot receive dividends until past and current dividends to cumulative preference shareholders have been paid in full.) |
5 | Participating preference Gives shareholders a stated dividend each year and an entitlement to share in extra profits after ordinary shareholders have received their dividends. |
6 | Redeemable preference Can be repurchased by the issuing company at some future date. |
7 | Company options Call (buy) options issued by companies on their own shares give holders the right (but not the obligation) to buy shares at a future date at a fixed price. Sell (put) options gives holders the right (but not the obligation) to sell shares at a future date at a fixed price. |
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