Variations In Ordinary Shares

Variations In Ordinary Shares

Variations in ordinary shares

There can be variations in the rights attaching to the ordinary shares of a company, but these are specifically stated, for example:

(1)Preferred ordinary. This designation usually implies their conveying dividend or repayment rights before the ordinary shares.

(2)Deferred ordinary. This designation implies their carrying rights after the ordinary shares (e.g., their rights to dividend may be deferred for a period of years, after which they might rank equally with the ordinary shares).

(3) Non-voting ordinary (sometimes referred to as 'A' or 'B' ordinary shares). These are invariably issued in order to prevent or to protect the controlling interest in a company from passing to outside hands. By having no vote, a holder of this type of share has no say whatever in the affairs of the company. In most cases, however, apart from the voting tights, the shares rank £pari passu with the ordinary shares.

To summarise, ordinary shares or stock units vary and can be:

Ordinary

Pivoting

Preferred-

Non-voting'A' or 'B'

Deferred

There can also be 'Pounder shares', which are entitled to a larger slice of dividends and sometimes to certain privileges.

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Read more The Rules of Investment in 2016



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