Difference between Equity shareholders and Preferential shareholders


Equity Shareholders are supposed to be the owners of the company, who therefore have the right to get dividend, as declared, and a right to vote in the Annual General Meeting for passing any resolution.

It is defined a preference share as that part of the share capital of the Company which enjoys preferential right as to: (a) payment of dividend at a fixed rate during the lifetime of the Company; and (b) the return of capital on winding up of the Company.

But Preference shares cannot be traded, unlike equity shares, and are redeemed after a pre-decided period. Also, Preferential Shareholders do not have voting rights.


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