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    SHARES

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    vishwanathswamy
    This document defines shares and the two main types - preference shares and equity shares. It provides details on: 1) Equity shares, also called common stock, represent ownership in a company. They provide voting rights and rights to dividends. Equity shares carry more risk but also more reward potential than other securities. 2) Preference shares provide the holder a fixed dividend that must be paid before dividends to equity shareholders. They also take priority over equity in the event of liquidation. Common types include cumulative vs non-cumulative and participating vs non-participating. 3) The document outlines key characteristics of each share type such as voting rights, ownership rights, par value, rights to additional

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    SHARES

    Uploaded by

    vishwanathswamy
    666 views22 pages
    This document defines shares and the two main types - preference shares and equity shares. It provides details on: 1) Equity shares, also called common stock, represent ownership in a company. They provide voting rights and rights to dividends. Equity shares carry more risk but also more reward potential than other securities. 2) Preference shares provide the holder a fixed dividend that must be paid before dividends to equity shareholders. They also take priority over equity in the event of liquidation. Common types include cumulative vs non-cumulative and participating vs non-participating. 3) The document outlines key characteristics of each share type such as voting rights, ownership rights, par value, rights to additional

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    This document defines shares and the two main types - preference shares and equity shares. It provides details on: 1) Equity shares, also called common stock, represent ownership in a company. They provide voting rights and rights to dividends. Equity shares carry more risk but also more reward potential than other securities. 2) Preference shares provide the holder a fixed dividend that must be paid before dividends to equity shareholders. They also take priority over equity in the event of liquidation. Common types include cumulative vs non-cumulative and participating vs non-participating. 3) The document outlines key characteristics of each share type such as voting rights, ownership rights, par value, rights to additional

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    666 views22 pages

    SHARES

    Uploaded by

    vishwanathswamy
    This document defines shares and the two main types - preference shares and equity shares. It provides details on: 1) Equity shares, also called common stock, represent ownership in a company. They provide voting rights and rights to dividends. Equity shares carry more risk but also more reward potential than other securities. 2) Preference shares provide the holder a fixed dividend that must be paid before dividends to equity shareholders. They also take priority over equity in the event of liquidation. Common types include cumulative vs non-cumulative and participating vs non-participating. 3) The document outlines key characteristics of each share type such as voting rights, ownership rights, par value, rights to additional

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 22

    Presented by

    Poornima
    &
    Nanda Kumar
    Definition Of Shares
    A share is the interest of a
    shareholder in a company. The capital
    of a company. Share means share in
    the share capital of a company. It
    includes stock except where a
    distinction between stock and share is
    expressed or implied [Sec.2(46)].
    A share has also been defined
    as “an interest having a money
    value and made up of diverse rights
    specified under the Articles of
    Association”. And in this sense it
    may be defined as a “bundle of
    rights and obligations”.
    Kinds Of Shares

     Preference shares &


     Equity shares
    Equity Shares
    Equity share are also called common
    stock/share or ordinary shares,
    investment in share. Equity shares are
    considered to be mere risky than both
    bonds and preference shares. They,
    however, afford greater advantage than
    both the other securities and in the capital
    market enjoy a better position as for as
    the investor attraction is concerned.
    Equity share gives several
    rights to shareholders. They
    have voting rights, rights of
    dividend, the rights of being
    offered right shares, the right of
    bonus issues and certain tax
    benefits.
    Characteristics Of Equity Shares

     Voting rights.
     Ownership rights.
     Par value.
     Right shares.
     Tax benefits.
    Voting rights

    A specific right of voting the


    members owning equity shares to
    receive the notice. Right to be elected
    from the members of the executive
    committee become the director of
    the company on purchasing shares.
    Ownership rights

     The equity share holders are also the


    owners of the firm. Each stock holders
    receives an ownership right
    equivalent to the stock that he holds
    in the firm. Every stock holder has the
    right to be a member of the company.
    Par Value

    An equity share has a face value


    or par value. Equity share may also be
    sold or issued at a premium or at a
    discount but the face value will be
    denomination. It shows the liability of
    an investor.
    Right shares

    The share holders has a right of


    receiving additional shares whenever
    they were issued by the company.
    Tax Benefits

    Up to Rs.7000 interest can be deducted


    under section 80c to calculate the total
    income of a person. But sometimes when the
    company is new, the investor can benefit of
    his holding in equity stock of new firms under
    section 80cc. Income in the form of dividends
    in the new undertakings is deductible before
    paying the tax for the first 5 years of the
    existence.
    Preference Share
    Preference share

     Preference shares capital is the sum of total


    of preference share. These shares carry the
    following preferential rights over equity
    shares.
     As regards dividends, to be paid a fixed
    amount or an amount calculated at a fixed
    rate.
     On winding up of the company, to return
    capital paid up.
    Kinds Of Preference shares

     Cumulative & Non-cumulative


    preference shares
     Participating & Non-Participating
    preference shares.
     Redeemable & Non-Redeemable
    preference shares
     Convertible & Non-convertible
    preference shares
    Cumulative preference share

    These shares are entitled to fixed


    dividends whether there are profits
    are no profits. If they are sufficient to
    pay dividends in a year, then the
    dividends are accumulated and paid
    in succeeding year.
    Non-cumulative preference share
    These types of shares are also
    entitled to fixed dividends, but profits
    are not sufficient or losses in a
    particular year and the dividends are
    not declared, these shares are not
    entitled to arrears of dividends in
    succeeding year.
    Redeemable preference share

    Shares which can be purchased back


    by the company are called
    redeemable preference share. The
    company reserves its right to call back
    or purchase shares at any time subject
    to the articles of association.
    Non-Redeemable preference shares

     These shares cannot purchased back


    by the company. After the
    commencement of the Company's
    Act 1998, no company limited by
    shares shall issue non-redeemable
    preference shares
    Participating & Non-Participating
    preference shares
    These shares have right to share in the
    surplus profits of the company besides
    the fixed dividends.
    Where as non-participating
    preference share does not have right to
    share in the surplus profits of the
    company besides the fixed dividends.
    Convertible & Non-convertible
    preference shares
     These shares may be converted into
    equity shares
     Where as non convertible preference
    shares cannot be converted into equity
    shares.
    Thank You

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