{"id":7826,"date":"2025-07-15T09:19:14","date_gmt":"2025-07-15T09:19:14","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&#038;p=7826"},"modified":"2025-07-15T09:20:09","modified_gmt":"2025-07-15T09:20:09","slug":"types-of-shares","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/types-of-shares\/","title":{"rendered":"Types of Shares"},"content":{"rendered":"<h2 id=\"what-are-shares\" class=\"wp-block-heading\">What Are <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/shares\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Shares<\/a>?<\/h2>\n\n\n\n<p><strong>Shares<\/strong> represent <strong>ownership in a company<\/strong>. When you buy shares, you become a <strong>part-owner<\/strong>, and your portion of ownership depends on how many shares you hold.<\/p>\n\n\n\n<p>There are two main <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/types-of-shares\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">types of shares<\/a>:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Ordinary or <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/equity-shares\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Equity Shares<\/a><\/strong><\/li>\n\n\n\n<li><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/preference-shares\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Preference Shares<\/a><\/strong><\/li>\n<\/ol>\n\n\n\n<h2 id=\"ordinary-shares-equity-shares\" class=\"wp-block-heading\"><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/ordinary-shares\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Ordinary Shares<\/a> (<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/equity\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Equity<\/a> Shares)<\/h2>\n\n\n\n<h3 id=\"meaning\" class=\"wp-block-heading\">Meaning:<\/h3>\n\n\n\n<p>These are the most <strong>common type of shares<\/strong> issued by companies. If you own equity shares, you:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Get <strong>voting rights<\/strong><\/li>\n\n\n\n<li>Share in the company&#x2019;s <strong>profits (<a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/dividend\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">dividend<\/a>s)<\/strong><\/li>\n\n\n\n<li>Benefit when the <strong>share price goes up<\/strong><\/li>\n<\/ul>\n\n\n\n<p>But &#x2014; if the company shuts down, <strong>you get paid last<\/strong> after all debts and preference shares.<\/p>\n\n\n\n<h3 id=\"key-features\" class=\"wp-block-heading\">Key Features:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Carry <strong>voting rights<\/strong><\/li>\n\n\n\n<li>Dividend is <strong>not fixed<\/strong> &#x2013; depends on profit<\/li>\n\n\n\n<li>Can benefit from <strong>capital growth<\/strong><\/li>\n\n\n\n<li>Higher <strong>risk<\/strong>, higher <strong>reward<\/strong><\/li>\n<\/ul>\n\n\n\n<h3 id=\"example\" class=\"wp-block-heading\">Example:<\/h3>\n\n\n\n<p>Ravi buys 100 equity shares of TCS. If the company does well, the share price rises, and Ravi earns profits. He also gets voting rights in the company&#x2019;s decisions.<\/p>\n\n\n\n<h2 id=\"preference-shares\" class=\"wp-block-heading\">Preference Shares<\/h2>\n\n\n\n<h3 id=\"meaning-1\" class=\"wp-block-heading\">Meaning:<\/h3>\n\n\n\n<p>Preference shares come with a <strong>fixed return (dividend)<\/strong> and are <strong>paid before equity <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/shareholders\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">shareholders<\/a><\/strong>. However, most <strong>don&#x2019;t have voting rights<\/strong>.<\/p>\n\n\n\n<p>These are like <strong>VIP seats<\/strong> &#x2014; they get preference in <strong>dividends and return of capital<\/strong>, but with limited powers.<\/p>\n\n\n\n<h3 id=\"key-features-1\" class=\"wp-block-heading\">Key Features:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fixed dividend<\/strong> payout (usually in %)<\/li>\n\n\n\n<li><strong>No or limited voting rights<\/strong><\/li>\n\n\n\n<li>Get priority in <strong>dividends<\/strong> and <strong>winding-up payments<\/strong><\/li>\n\n\n\n<li>Safer than equity, but <strong>lower growth potential<\/strong><\/li>\n<\/ul>\n\n\n\n<h3 id=\"types-of-preference-shares\" class=\"wp-block-heading\"><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/types-of-preference-shares\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Types of Preference Shares<\/a>:<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Cumulative<\/strong> &#x2013; Unpaid dividends are carried forward<\/li>\n\n\n\n<li><strong>Non-Cumulative<\/strong> &#x2013; No carry forward if dividend isn&#x2019;t paid<\/li>\n\n\n\n<li><strong>Convertible<\/strong> &#x2013; Can be converted into equity shares<\/li>\n\n\n\n<li><strong>Non-Convertible<\/strong> &#x2013; Cannot be converted<\/li>\n\n\n\n<li><strong>Participating<\/strong> &#x2013; May get extra profit share<\/li>\n\n\n\n<li><strong>Non-Participating<\/strong> &#x2013; Only fixed dividend<\/li>\n<\/ol>\n\n\n\n<h3 id=\"example-1\" class=\"wp-block-heading\">Example:<\/h3>\n\n\n\n<p>Priya buys preference shares in Reliance at 7% annual return. Even if the company doesn&#x2019;t grow fast, she gets her 7% yearly dividend before equity holders get anything.<\/p>\n\n\n\n<h2 id=\"quick-comparison-table\" class=\"wp-block-heading\">Quick Comparison Table<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Feature<\/th><th>Equity Shares<\/th><th>Preference Shares<\/th><\/tr><\/thead><tbody><tr><td>Dividend<\/td><td>Variable<\/td><td>Fixed<\/td><\/tr><tr><td>Voting Rights<\/td><td>Yes<\/td><td>Usually No<\/td><\/tr><tr><td>Risk Level<\/td><td>Higher<\/td><td>Lower<\/td><\/tr><tr><td>Profit Potential<\/td><td>Higher<\/td><td>Limited<\/td><\/tr><tr><td>Priority in Payment<\/td><td>After Preference<\/td><td>Before Equity<\/td><\/tr><tr><td>Suitable For<\/td><td>Growth seekers<\/td><td>Income seekers<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"conclusion\" class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p><strong>Equity shares<\/strong> are great if you want long-term growth and don&#x2019;t mind ups and downs. <strong>Preference shares<\/strong> are better for those who want steady, fixed returns with lower risk. Both serve different goals, and investors can choose based on their <strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/risk-tolerance\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">risk tolerance<\/a> and income needs<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What Are Shares? Shares represent ownership in a company. When you buy shares, you become a part-owner, and your portion of ownership depends on how many shares you hold. There are two main types of shares: Ordinary Shares (Equity Shares) Meaning: These are the most common type of shares issued by companies. If you own [&#x2026;]<\/p>\n","protected":false},"author":9,"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"class_list":["post-7826","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":2,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7826\/revisions"}],"predecessor-version":[{"id":7829,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7826\/revisions\/7829"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=7826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}