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Types of Preference Shares

Preference shares can be of the following types

(1) Ordinary Preference Share – In this, dividend is paid at a fixed rate on profit. In the year the company does not make profit, no dividend will be paid to them.

(2) Cumulative preference share—Cumulative preference share means such shares on which dividend if

If profits are not paid in any year due to inadequacy, then it gets added and if there is sufficient profit in the following year, then first the combined dividend of the previous years will be paid, followed by the dividend of the current year.

(3) Convertible Preference Shares – These shares are given the right to be converted into equity shares after a certain period of time. (4) Non-convertible preference shares—These shares are converted into equity shares after a certain period of time.

The right to change is not given.

(5) Preference shares due – Such preference shares which can be paid at any time during the life of the company are called due or redeemable preference shares.

(6) Bad preference shares—Preference shares which are not paid during the lifetime of the company Can be redeemed or redeemable are called preference shares.

(7) Shared preference shares—Dividends received on such preference shares at the rate of a certain percentage

After doing so, subject to certain conditions, one gets the right to share in the additional profits of the company.

(8) Non-participated preference shares—any of the additional profits of the company on such preference shares

share is not received.

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