Congratulations seem like you understand what a share and shareholder is! But did you know that there are 2 types of shares in a company? In Malaysia, we call these shares Ordinary shares and Preference shares. To put it in simple terms:
Sometimes known as equity shares or a risk capital of a company. It gives the holder the rights of ownership:
- Share in profits
- The power to vote in Annual General Meetings (AGMs) and appoint or dismiss directors.
- Money will be lost if the business has failed or is losing money.
- The total share of a company is mostly consisting of ordinary shares.
- Do not have special rights over other shares.
- If a company closes ordinary shares will rank after other liabilities of a business.
- These shares are those that will carry (usually fixed) dividend which is.
- If a business closes, preference shares will be treated as a distribution of assets.
- Normally do not have voting rights.
- However, they might have the right to vote if dividends are not paid to preference shareholders.
So, now do you know why you can’t just barge into big companies such as Apple’s headquarters asking to change their apple logo into orange when you have a fraction of their share? Yes, that’s because you most likely have their preference share instead of the ordinary share. And of course, you have only a minuscule portion of the share compared to other shareholders.
Why not be your own shareholder by starting your business then? You will only need to worry about these different types of shares when you grow into an MNC (which might not be too far away if we work together!). Don’t worry we will be by your side every step of the way! Drop us an email at [email protected] for more information on how to start your own company!