Equity share definition

An

equity share, commonly referred to as ordinary share also represents the form of fractional ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights. A company may issue such shares with differential rights as to voting, payment of dividend, etc

kinds of issue equity shares

The

various kinds issue of equity shares are as follows

Rights Issue/ Rights Public issue Under writing issues Private placements

Shares

introduction
Share holders equity means includes both ordinary and preference share. Ordinary shares provides ownership right to investors Debentures and bonds provide loan capital to the company.

features
Ordinary shares has a number of special features which is distinguish it from other securities Claim on assets Right to control Voting rights Claim on income Limited liability

pros

cons

Permanent capital Borrowing base Dividend payment discretion

Cost Risk Earning dilution Owner ship dilution

Pros and cons