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Rights of equity shareholders

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This query is : Resolved

sangeeta vaishnav (Querist)

23 July 2012 I want to know the rights of equity shareholders of Private Company.As per AOA & MOA no rights are given for voting rights of Private Company.

CS Divya Sorayan

CS Divya Sorayan (Expert)

25 July 2012 1. Equity share holders are the owners of the company.They have the right to receive dividends. Preference share holders has the prference to get fixed rate of interest of profit for their shares.
2. Equity share holders enjoy voting right in the company whereas prefernce shareholders hav no such right.
3. Equity Shareholders hav right to capital but prefernce shareholders comes after it.
4. Equity Shareholders bears more risk as compare to prefernce shareholders..
5. The capital which is collected from equity share holders is known as equity capital and the capital which is collected from prefernce share holders are known as prefernece capital.The differnce between equity and prefernce capital is the prefernce share holders will have prferntial rights compare to equity shareholders ,prefernital rights in terms of payment of dividend and in terms of repayment of capital at the time of winding of the company.

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