Equity shares are the most popular type of shares, generally, the shares we talk about our Equity Share, but instead of saying equity we call only the stock. Equity share is also known as an ordinal share, Equity Share is also called a stock only in the short run, it means if there is nothing written in front of any stock - only "share" is written, then it should be considered Equity Share goes. In addition to this, equity shares, which are held by them, are called the real boss of the company, the equity shares with whom they are called equity shareholders.
1. Equity Share
2. Preference share
3. DVR SHARE
Equity share is also known as an ordinal share, Equity Share is also called a stock only in the short run, it means if there is nothing written in front of any stock - only "share" is written, then it should be considered Equity Share goes.
Why are the owners of the equity shareholder company?
Equity shareholder is considered to be the real owner of the company because equity shareholder has the right to vote in the decision-making process in the company, thus controlling the work of the Equity Share Holder Company. Wherever only the shares are being talked about, it means that - there is the only talk of "Equity Share" unless there is something else written before those shares, such as - Preference share, Or DVR share.
Also, Equity Share Holder is given a share of dividends from the last surviving benefit, and if the company does not have the money to profit, then the equity shareholder does not get any benefit. This is necessary - if the company is making more profit, then the Equity Shareholder is likely to get more profit,
In this way, Equity Shareholders take the most risk on their capital, because if the company closes, then Equity Share Holder gets the capital back at the end, and that is why they are called the real owner of the company.
Advantages to the Company from Equity Shares -
On the equity share, the company delivers the dividend itself, if the company decides, if the dividend is not given, the equity shareholder does not get any dividend. Equity share is the most beneficial for the company to raise capital, as the company does not have the time to return the capital on issuance of equity shares, the equity share capital is given at the end of the company's closing. Issuing an equity share does not generate any additional liability on the company's property, Equity Share can be easily traded on the stock market.
Advantages to Equity Shareholders by Equity Share-
Equity shareholders are the real owners of the company, who have control over the affairs of the company, and they have the Voting Rights. There is no limit to the profit of equity shareholder, and their liability is equal to the shares bought by them, If the company earns a big profit, then it gets the advantage of the equity shareholder, the price of equity shares increases and the second dividend is expected to get more.
What is PREFERENCE SHARE (PREFERENCE SHARE)?
You will see that the first shadow in the Preference Share is a preference, which makes it clear that Preference Share (Preferred Share) has certain special rights already fixed.
For example, in the case of Preference Share, how much dividend will be given to the Preference shareholder every year, it is already decided, And the second shareholder does not have the right to vote, the biggest difference is in equities and preference shares. The thing to note is that - there are many different types of preference shares. But, the main thing to understand is that - In today's time, any company is more interested in issuing equity shares than the preference shares.
What is DVR SHARE (DVR share)?
The full form of DVR is - Shares with Differential Voting Rights. There is a mixed form of both equity and acquisition shares of this type, in which the DVR shareholder does not have the right of voting as an equity shareholder, only a few percents, However, the DVR shareholder gets more dividends.
At present - two companies in India have issued DVR share, first - TATA MOTORS and second - JAIN Irrigation.