Share Capital and Types of Shares — SPCC STD 11 Commerce — Question

Characteristic of Equity Share:
1. True owners: Such type of shareholders is known as true owners or faithful companion because they bear more risk than preference share holders.
2. Voting rights: The equity share holders have a right to vote in the meeting of the company.
3. Dividend: Equity shareholders’ dividend and rate of dividend is uncertain.
4. Link with Profit: The dividend on equity share is directly related with the profit of the company. The dividend varies with the increase or decrease of profit.
5. General Meeting: The equity shareholders have a right to remain present in the general meeting. They have the power to exercise voting rights and right to select directors.
6. Refund of Capital: Equity shares are nonrefundable until the existence of the company.
7. Dissolution: At the time of dissolution, the equity shareholders are refunded after paying the preference share capital.
8. Benefits and Returns: On this type of share various benefits and returns are like rights shares, bonus shares and benefits of rise in the price of the share in the market.
9. Registration of Share: Such equity share is registered in a recognized share market. So these shares can be purchased and sold at the market price easily.