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Give difference between equati share and …

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Give difference between equati share and priferance share
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Gaurav Seth 5 years, 3 months ago

 

 

<th>BASIS FOR COMPARISON</th> <th>EQUITY SHARES</th> <th>PREFERENCE SHARES</th>
Meaning Equity shares are the ordinary shares of the company representing the part ownership of the shareholder in the company. Preference shares are the shares that carry preferential rights on the matters of payment of dividend and repayment of capital.
Payment of dividend The dividend is paid after the payment of all liabilities. Priority in payment of dividend over equity shareholders.
Repayment of capital In the event of winding up of the company, equity shares are repaid at the end. In the event of winding up of the company, preference shares are repaid before equity shares.
Rate of dividend Fluctuating Fixed
Redemption No Yes
Voting rights Equity shares carry voting rights. Normally, preference shares do not carry voting rights. However, in special circumstances, they get voting rights.
Convertibility Equity shares can never be converted. Preference shares can be converted into equity shares.
Arrears of Dividend Equity shareholders have no rights to get arrears of the dividend for the previous years. Preference shareholders generally get the arrears of dividend along with the present year's dividend, if not paid in the last previous year, except in the case of non-cumulative preference shares.
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