Sunday, July 25, 2010

Types of Ordinary Shares

Voting Ordinary Shares
These ordinary shareholders will have the right to vote. Therefore the voting ordinary shareholders will control the company. The major decisions such as appointment of the board of directors will be carried out by the ordinary shareholders to have the power.

Non Voting Ordinary Shares
Companies may issue non voting ordinary shares so that the control within the company will not be loss and these shareholders will take the same level of risk but they will not have the right to vote.

Differed Ordinary Shares
This is the special type of ordinary share issue by the company where the company will have a condition under which the differed ordinary shares will be paid a dividend only if the other ordinary shareholders are paid a dividend more than a specified amount.
Eg: A company to issue differed ordinary shares where the shareholders will be paid the dividend only if the ordinary shareholders are paid a dividend more than a specified dividend such as 50 p per share.

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