types of shares

types of shares

Distinguish between «simple» and «preferred» types of shares.
Ordinary share gives its holder the right to vote at the General meeting of shareholders, i.e., participation in the management of joint-stock company. But at the sparseness of shares between the many small holders real power in the management of the company is concentrated in the hands of those who possess the control block of shares. Theoretically, it is 50 % of the issued shares + 1 share. Practically, the founders of the company may have an influence on the policy of the company, leaving itself only 10-15 % of the total number of issued shares (sometimes even less).
In addition to common shares may be issued types of preferred shares. When creating a joint stock company in its Charter specifies the ratio of the issued common and preferred shares. Feature of the preferred shares is that the volume of the received them dividend is fixed character. Holders of ordinary shares are in a period of not receive dividends. This can happen for various reasons. For example, in virtue of the fact that the General meeting of shareholders decides not to distribute the profit for this year, and entirely to direct it on development of the production. But dividends on preferred shares shall be paid in a mandatory manner. But in case of success of the firm benefit of the holders of the common shares they receive higher dividends because of their size is not fixed, as in the privileged.
Owners of preferred shares have no voting rights at the General meeting of shareholders. But in case of liquidation of the joint stock company's calculation of its debts after the repayment of debts is made first with the owners of the preference shares and in the last place, from the remnants of the liquidated property, - the owners of ordinary shares.
Buying a share, its the buyer bears the risk of not getting the expected return. Because the stock price fluctuates under the influence of many factors, associations resulting both in the production sphere, and in sphere of circulation of securities. On rate of shares impact the profitability of work JSC, the amount of dividends to be paid, as well as the ratio of demand and supply on the shares of the company. Enticed by promises of high dividends from an unknown company, the buyer may be at the end of the business year with nothing. Shares of solid, stable profitable and paying dividends to shareholders of companies, although it does not Bode fantastically rich quick - reliable.
Management of the joint stock company is implementing democratic principles in the context of the economic isolation of the economic entities. The Supreme management body of a JSC is recognized as the meeting of the voting rights of shareholders, which elects the governing and controlling bodies - the Board of Directors, management Board, audit Commission, etc. In fact, the decisions are taken by a group of shareholders owning types of shares the controlling package of shares.

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