Q.What is an equity share ?

An equity share is a share carrying no fixed/preferential dividend or repayment right; equity shareholders are the real owners, have voting rights, and get the residual profit after preference dividend. An equity share (ordinary share) is a share which is not a preference share. It does not carry any fixed rate of dividend and has no preferential right either to dividend or to repayment of capital on winding up. Key features: - Equity shareholders are the real owners of the company and bear the ultimate risk. - They enjoy voting rights and control the company's management. - Dividend is paid to them only after the preference dividend, out of the residual (remaining) profits, and its rate is not fixed. - On winding up, their capital is repaid last, after all other claims are settled. …