Question

What is the difference between Equity Shares and Preference Shares?

Answer 1

Preference shareholders are entitled to a fixed rate of dividend but Equity shareholders will get dividend only if any profit is left after distributing dividend to the Preference shareholders.

Similarly, at the time of liquidation, Preference shareholders will get preference in getting their money back before the Equity shareholders who may get money only if there is anything left.

Preference shareholders do not have voting right but Equity shareholders have voting rights in the company.