DIFFERENCE BETWEEN EQUITY SHARE CAPITAL & PREFERENCIAL SHAR
CAPITAL

Answer Posted / 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.

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