Updated on March 16, 2023
Preferential shares are a part of a company’s share capital.
Preferential Shares or Preference shares allow shareholders to enjoy a preferrential access to the company’s dividends and profits over common or equity shareholders. Some of the common types of preferential shares include:
a. Convertible Preference Shares
b. Non-Convertible Preference Shares
c. Redeemable Preference Shares
d. Non-Redeemable Preference Shares
e. Participating Preference Shares
f. Non-Participating Preference Shares
g. Cumulative Preference Shares
h. Non-Cumulative Preference Shares
i. Adjustable Preference Shares
Can preferential shares be converted to common equity?
These shares can be converted to common stock if the terms of issue permit the same.