Issuing shares to the investors and the general public is a method to raise capital for the company and provide the shareholders with a small wedge of ownership in the business. The Preference Shares are those which have some preferential rights over the other types of shares. Most types of equity shares include voting rights to an investor, allowing him/her to choose individuals responsible to run the business. Equity shares are also known as Ordinary Shares. Various types of equity capital are authorized, issued, subscribed, paid up, rights, bonus, sweat equity etc. It then offers its equity share to the general public. Equity share is a main source of finance for any company giving investors rights to vote, share profits and claim on assets. The shares which can be issued by a company, are of two types:- 1. Under the common equity category are classifications — such as class A or class B shares — that grant investors different rights. If any company whether it is public or private requires to raise funds from the financial market (public), there are two options available, either Debt funds or equity funds.. We will discuss here only about equity funds as of now. These shares also give right to the distribution of the company’s assets in the event of winding-up or sale. Shares of stock in a company fall into two categories: preference share capital and ordinary share capital. The ordinary shareholders have voting rights in the meeting of the company. Equity funds tend to focus their investment on various countries, regions, industries and investment styles as a way of diversifying, or spreading risk. Equity Shares: Equity shares, with reference to any company limited by shares, are those which are not preference shares [(Sec. Right Share – Companies give right shares to existing shareholders of the company. Difference between Equity Shares and Preference Shares. ADVERTISEMENTS: Meaning: Equity shares are the main source of finance of a firm. Equity share is a main source of finance for any company giving investors rights to vote, share profits and claim on assets. Ordinary shares represent the company’s basic voting rights and reflect the equity ownership of a company. The equity stockholders get the opportunity to cast their vote in major business decisions. Equity funds can be generally split into the following categories: Developed markets Equity share and Preference share are the two types of share that a company issues. A company may have many different types of shares that come with different conditions and rights in relation to profit entitlement, entitlement to capital if the business is wound up and voting rights within the business.. Share types. 1. Various types of equity capital are authorized, issued, subscribed, paid up, rights, bonus, sweat equity etc. When an investor talks about "equity shares," she's usually referring to ordinary shares. Types of Shares: The following types of shares are discussed below. What are Equity Shares? Types of Equity Share. Let us look at the various types of shares a company can issue - equity share and preferential share Shares mean a part in the ownership of the company. Equity share­holders do not enjoy any preferential rights with regard to repayment of capital and dividend. Equity shareholders are … Common equity is one of two types of equity investments, with the other being preferred equity. These shares also give right to the distribution of the company’s assets in the event of winding-up or sale. Preference shareholders are paid first in the event of a bankruptcy and receive a fixed dividend per share. However, general equity shareholders have voting rights, while preference shareholders do not. Equity share is an ordinary share. It is issued to the general public. Equity Shares. Equity shares were earlier known as ordinary shares. Share, which cannot be redeemed during the life time of the company is known as irredeemable preference share. There are a number of different types of equity funds, each with their own characteristics and level of risk.

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