ACCA LW ^Eng Syllabus E. Capital And The Financing Of Companies - Different Classes of Shares - Notes ^{2 / 4}

There are 4 types of shares

1. Ordinary shares

   These shares come with... 

   Voting rights
   Variable Dividends receivable
   Can attend general meetings
   Get paid out last on Liquidation
   Get paid out the capital they put in plus their share of any surplus assets leftover

2. Preference shares

   These shares come with... 

   Normally no Voting rights
   Fixed Dividends receivable
   Restricted attendance at general meetings
   Get paid out before ordinary shareholders on Liquidation (hence their name)
   Only get paid out the capital they put in

3. Redeemable shares

   These shares can be bought back by the company - although there must always be some irredeemable shares in issue

4. Deferred shares 

   These shares only receive a dividend when the ordinary shareholders have received their fixed return

Treasury Shares

These are the shares which the company have bought back from shareholders

So they reduce the number of shares on the open market. 

All companies have an authorised amount of sharesl that it can issue legally

Class Rights

A company may have different classes of the same types of share.

Eg. Ordinary A, Ordinary B, Ordinary C etc. 

They do this as each different class will have different rights we call these Class Rights

These class rights might include things like:

• Voting Powers

• Who gets paid the dividend first

Changing the Class Rights

Yes this can be done if:

• The articles allow for variation

• 75% of that shareholder class agree

  However the others (the minority interest of at least 15%) can object within 21 days of the vote