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DIFFERENCE BETWEEN EQUITY SHARE CAPITAL & PREFERENCIAL SHAR
CAPITAL
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Answer / soori
Four Major Difference between Equity and Preferencial Share
capital.
1)Voting rights
Equity share holders: Yes
Preference Share holders: No
Equity share holders are having ownership and voting rights.
They make a decision to through his voting rights
2)Dividend
Equity shareholder may get dividend after geting prefernce
share holders.so company gives preference to shareholder
thats why we call as a preferencial shareholders.
Eg: PS look like this way: 15% Preferencial share capital
15% is the dividend.
3)At the time of liquidation
At the time of liquidation preference shareholder get back
the money from the company rather than equity shareholders.
4)Redeemable and convertiable.
Preference share capital can be redeemed and covertable as
a equity shares and debentures .But equity share capital
cann't be redeemable and convertable as a shares.
| Is This Answer Correct ? | 67 Yes | 4 No |
Answer / rahil khan
your answer is very correct but you can also add this point
that " equity share holders are the maximum risk taker and
preference share holders are the minimum risk taker "
thanks,
Rahil Khan
| Is This Answer Correct ? | 18 Yes | 3 No |
Answer / soori
the person who marked as wrong, need to tell the answer.
| Is This Answer Correct ? | 21 Yes | 10 No |
Answer / m.mohanapriya
equity share holders as a one of the owner of company.
preferencial share holders get divident, equity share
holdres
| Is This Answer Correct ? | 9 Yes | 1 No |
Answer / anuj arora
Major Difference between Equity and Preferencial Share
capital.
1)Voting rights
Equity share holders: Yes
Preference Share holders: No
Equity share holders are having ownership and voting rights.
They make a decision to through his voting rights
2)Dividend
Equity shareholder may get dividend after geting prefernce
share holders.so company gives preference to shareholder
thats why we call as a preferencial shareholders.
Eg: PS look like this way: 15% Preferencial share capital
15% is the dividend.
3)At the time of liquidation
At the time of liquidation preference shareholder get back
the money from the company rather than equity shareholders.
4)Redeemable and convertiable.
Preference share capital can be redeemed and covertable as
a equity shares and debentures .But equity share capital
cann't be redeemable and convertable as a shares.
5)Equity Shareholders take more risk as compared to
preference shareholder, they carry fixed rate of dividend
i.e. if company is earning profit then it will distribute
the dividend at that fixed rate to prefernce shareholders
and then the remaining profit are distributed among equity
shareholders
| Is This Answer Correct ? | 9 Yes | 1 No |
Answer / sachin
EQuity Shareholderis owner of the company. they have rights
to take dicision, attent meeting & voting .
butPreference shareholder no rights to take any dicision
and voting rights in copmpany.they have first right only
dividend. At the time of liquidation they have preference
to get back money before equity shareholder
| Is This Answer Correct ? | 1 Yes | 1 No |
Answer / shreya
Generally, preference shareholders do not have any voting rights. However, they can vote on matters directly relating to the rights attached to the preference share capital. Any resolution for winding up of the company or for the reduction or repayment of the share capital shall be deemed to affect directly the rights attached to preference shares. Where the preference shares are cumulative (in respect of dividend) and the dividend thereon has remained unpaid for an aggregate period of two years before date of any meeting of the company, the preference shareholders will have right to vote on any resolution. In case of non-cumulative preference shares, preference shareholders have right to vote on every resolution if dividend due on their capital remains unpaid, either in respect of period of not less than two years ending with the expiry of the financial year immediately preceding the commencement of the meeting or in respect of aggregate period of not less than three years comprised in six years ending with the expiry of concerned financial year.
| Is This Answer Correct ? | 0 Yes | 0 No |
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