Q.Write a short note on: Equity Shares

Equity shares represent the ownership capital of a company. Equity shareholders are its real owners — they enjoy voting and control rights, receive a variable dividend after preference shareholders, bear the greatest risk, and are repaid last on winding up.

Equity shares (also called ordinary shares) are shares that are not preference shares. They form the permanent, owned capital of a company and make their holders the real owners of the company. Key points:

• Equity shareholders carry voting rights and thus control the management of the company.
• They receive dividend at a fluctuating rate, and only after preference shareholders have been paid.
• They are the primary risk-bearers — in bad years they may get no dividend, and on winding up they are repaid last, after all creditors and preference shareholders.
• Equity capital need not be repaid during the life of the company, giving the company a stable financial base. …