What are Equity
Shares?
An equity share is a basic term that associates with a company.
Let us begin the article by knowing the meaning of equity shares.
What are Equity
Shares?
Equity shares are also termed as ordinary
shares of the company. The holders of equity shares have the right to vote in
the meetings of the company. They are the real owners of the company. The
dividend payment is first made to preferential shareholders and later to equity
shareholders. However, the right to control and manage the company lies in the hands
of equity shareholders.
Let us have a look at some of the features
of equity shares.
Features of Equity
Shares
·
They bear the highest risk as they are the owners of the company.
·
They can be transferred from one person to another with or without
any consideration.
·
They are permanent in nature.
·
The rate of dividend is not fixed for equity shareholders.
·
They manage the affairs of the company.
Let us now have a look at some of the advantages
of equity shares.
Advantages of Equity
Shares from Shareholder’s Point of View
·
Equity shareholders are the real owners of the company and have the
voting rights.
·
During profits, equity shareholders gain a lot in the form of
higher dividend and increase in the value of shares.
Advantages of Equity
Shares from Company’s Point of View
·
They can be issued without mortgaging or creating any charge on the
assets of the company.
·
There is no obligation to pay a dividend
on equity shares. Dividend needs to be paid only if there are profits.
·
It is the permanent source of income for the company that needs to
be repaid only at the time of liquidation.
Conclusion
Trading and investing in equity shares is
hugely popular. Indira Securities provides all financial services related to
equity shares. Our clients can avail our services by applying for an IPO or
investing/trading in equity markets. Open a demat account with us and we will
help you in identifying growth stocks for your portfolio. If you have any
query, you can reach us via call or email.