Meaning: Equity shares are those shares which are ordinary in the course of company's business. They are also called as ordinary shares. These share holders do not enjoy preference regarding payment of dividend and repayment of capital.Equity shareholders are paid dividend out of the profits made by a company. Higher the profits, higher will be the dividend and lower the profits, lower will be the dividend Shares having a claim to participate in the whole range of annual profits remaining to a company after it h as satisfied all charges and met any fixed preferential dividends, and having a right to participate in surplus assets in a winding-up. Also referred to as ordinary shares or (in the USA) common stock. Shares which represent the right to participate in the residual assets of a business and which usually have voting rights. They will usually receive a dividend, the level of which depends on how successful the company is. ... Equity share are also know as ordinary shares. Every company has to issue equity shares. Equity capital is also known as ‘OWENED CAPITAL or ‘VENTURE CAPITAL. definition Indian companies Act, 1956 defines equity shares as “those shares which are not preference shares” The definition indicates that: The equity shares do not have preference for dividend. The equity shares do not have preference for repayment of capital at the time of winding-up of the company. Difference between equity shares and preference shares Preference Shares have 2 preferences first payment of dividend in every year in which dividend is proposed & first share capital of preference shares will be payab;e @ winding up or liquidation of the co mpany,where as equity share holders dividend after preference share holders & even share capital capital is also paid after paying to preference share holders. 2)preference share holders are not owners of the company and do not enjoy any voting right. Where as Equity Shares has voting right & they are the real owners of company.
