Preference shareholders

The preference shareholders have a prior claim to any company profits available for distribution. They share carrying a fixed rate of dividend, also be called preferred shareholders.

Special categories of preference shares inculde:

• participating preference shares: where shareholders are entitled to participate together to a specified extent in distributable profits and surpluses on liquidation
• redeemable preference shares: the terms of issue specify that they are repayable by the company.

Related posts:

1. The difference between ordinary and preference shares
2. What are the ordinary shares?
3. Disclosures relating to share capital