Are there different types of shares?

Yes, there are two types of shares:

1. Ordinary shares

Most companies only have ordinary shares. These shares entitle the holder:

• 1 vote per share
• Equal participation in dividends
• A share in the surplus capital (if the company is wound-up)

2. Preference shares

These shares have preferential rights over ordinary shares, usually in respect to dividends.

e.g., fixed amount of dividends, or alternatively, participating in profits beyond the fixed dividend under a fixed formula.

These shares may also be given priority on in return of capital upon winding-up (but are not entitled to surplus capital).

Preference shares are often non-voting, and are redeemable.