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types of fractions

The following two types of shares can be issued by a company

(1) Equity Shares Equity Share means those shares of the company which are not preference shares. They get dividend only after distributing the dividend to the preference shareholders out of the divisible profit of the company and if there is no profit left after distributing the dividend to the preference shareholders, then they do not get anything in the form of dividend. The rate at which they should pay dividend is decided by the operators. Even after returning the capital of the preference shareholders on the dissolution of the company, if the amount remains, then only the capital of these shareholders will be returned.

(2) Preference Shares These shares mean those shares which are given preference regarding dividend and repayment of capital.

 

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