{"id":12032,"date":"2025-02-28T08:34:23","date_gmt":"2025-02-28T08:34:23","guid":{"rendered":"https:\/\/wp-api.pocketful.in\/blog\/?p=12032"},"modified":"2025-06-06T12:25:03","modified_gmt":"2025-06-06T12:25:03","slug":"different-types-of-shares","status":"publish","type":"post","link":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/","title":{"rendered":"What are the Different Types of Shares\u00a0"},"content":{"rendered":"\n<p>When investing in the stock market, understanding the types of shares is crucial for making informed investment decisions. Shares represent ownership in a company and provide investors with certain rights, such as voting and dividend income. Companies issue different types of shares to meet their capital requirements, each offering different benefits to investors.<\/p>\n\n\n\n<p>This guide will break down the various types of shares, their features, and their importance.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#What_Are_Shares\" title=\"What Are Shares?\">What Are Shares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#Types_of_Shares_in_India\" title=\"Types of Shares in India\">Types of Shares in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#Types_of_Common_shares\" title=\"Types of Common shares&nbsp;\">Types of Common shares&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#Types_of_Preference_Shares\" title=\"Types of Preference Shares\">Types of Preference Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#Key_Differences_Between_Equity_and_Preference_Shares\" title=\"Key Differences Between Equity and Preference Shares\">Key Differences Between Equity and Preference Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#Why_Understanding_Share_Types_is_Important_for_Investors\" title=\"Why Understanding Share Types is Important for Investors\">Why Understanding Share Types is Important for Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#Frequently_Asked_Questions_FAQs\" title=\"Frequently Asked Questions (FAQs)\">Frequently Asked Questions (FAQs)<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"h-what-are-shares\"><span class=\"ez-toc-section\" id=\"What_Are_Shares\"><\/span>What Are Shares?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Shares, also known as stocks, signify ownership in a company. When you buy shares, you become a shareholder, meaning you own a portion of the company. Companies issue shares to raise capital for expansion, operations, or debt repayment. Shares can be broadly classified into equity shares and preference shares.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-types-of-shares-in-india\"><span class=\"ez-toc-section\" id=\"Types_of_Shares_in_India\"><\/span>Types of Shares in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Shares are primarily divided into two categories:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Equity Shares<\/strong> (Common Shares)<\/li>\n\n\n\n<li><strong>Preference Shares<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Let\u2019s explore each in detail.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-a-equity-shares-common-shares\"><strong>A. Equity Shares (Common Shares)<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.pocketful.in\/blog\/what-are-equity-shares\/\">Equity shares<\/a>, also known as ordinary shares, are the most common type of shares issued by companies. These shares provide ownership rights to investors and entitle them to vote in key company decisions. However, equity shareholders receive <a href=\"https:\/\/www.pocketful.in\/blog\/what-is-dividend-in-stock-market\/\">dividends<\/a> only after preference shareholders are paid.<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Features of Equity Shares:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Voting rights in company matters<\/li>\n\n\n\n<li>Dividends depend on company profits<\/li>\n\n\n\n<li>Higher risk but the potential for high returns<\/li>\n\n\n\n<li>Can be easily traded in the stock market<\/li>\n<\/ul>\n\n\n\n<p>Shareholders of equity shares have voting rights in company decisions and earn returns in the form of dividends and capital appreciation. However, they bear the highest risk as they are the last to receive payouts in case of liquidation.<\/p>\n\n\n\n<p><strong>Read Also:<\/strong> <a href=\"https:\/\/www.pocketful.in\/blog\/right-issue-of-shares\/\">What is Right Issue of Shares: Meaning, Examples, Features<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-types-of-common-shares-nbsp\"><span class=\"ez-toc-section\" id=\"Types_of_Common_shares\"><\/span>Types of Common shares&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-1-authorized-shares\">1. Authorized Shares<\/h4>\n\n\n\n<p>Authorized shares refer to the maximum number of shares a company is legally allowed to issue as per its Articles of Association (AoA). This number can be increased after approval from shareholders and regulatory bodies.<\/p>\n\n\n\n<p>Example: If a company has 1 million authorized shares but has only issued 600,000 shares, it still has 400,000 shares available for future issuance.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-2-issued-shares\">2. Issued Shares<\/h4>\n\n\n\n<p>Issued shares are the portion of authorized shares that a company has allocated for sale to investors, including the public, institutions, or promoters.<\/p>\n\n\n\n<p>Example: 600,000 issued shares represent the number of shares that investors can collectively subscribe to.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-3-subscribed-shares\">3. Subscribed Shares<\/h4>\n\n\n\n<p>Subscribed shares are those issued shares that investors have agreed to purchase. This means these shares are now owned by investors.<\/p>\n\n\n\n<p>Example: A company issues 600,000 shares, but only 550,000 are subscribed\u2014meaning 50,000 shares remain unsold and 550,000 are purchased.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-4-paid-up-shares\">4. Paid-up Shares<\/h4>\n\n\n\n<p>Paid-up shares are the portion of subscribed shares for which investors have fully paid. Since most shares in modern companies are fully paid at issuance, paid-up capital often matches subscribed capital.<\/p>\n\n\n\n<p>Example: If investors have fully paid for 550,000 shares, then the paid-up capital is equivalent to the subscribed capital.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-5-bonus-shares\">5. Bonus Shares<\/h4>\n\n\n\n<p>Bonus shares are additional shares given to existing shareholders from the company&#8217;s retained earnings. These shares are issued instead of cash dividends to reward shareholders.<\/p>\n\n\n\n<p>Example: A company declares a 1:2 bonus issue, meaning that for every two shares a shareholder owns, they receive one additional share for free.<\/p>\n\n\n\n<p><strong>Read Also:<\/strong> <a href=\"https:\/\/www.pocketful.in\/blog\/demat\/when-bonus-shares-are-credited-in-demat-account\/\">When Bonus Shares Are Credited in Demat Account?<\/a><\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-6-rights-shares\">6. Rights Shares<\/h4>\n\n\n\n<p>Rights shares are issued to existing shareholders at a discounted price before being offered to the general public. This allows shareholders to maintain their ownership percentage in the company.<\/p>\n\n\n\n<p>Example: A company offers 1 rights share for every 5 shares held at a discounted price.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-7-sweat-equity-shares\">7. Sweat Equity Shares<\/h4>\n\n\n\n<p>Sweat equity shares are issued to employees or directors as a reward for their contribution, typically for non-cash services such as expertise, innovation, or patents.<\/p>\n\n\n\n<p>Example: A tech startup rewards an employee with 1,000 sweat equity shares for developing proprietary software.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-8-voting-amp-non-voting-shares\">8. Voting &amp; Non-Voting Shares<\/h4>\n\n\n\n<p>Voting shares have voting rights that allow shareholders to vote on company matters.<\/p>\n\n\n\n<p>Non-voting shares grant ownership stake but no voting rights. These are often given to employees or strategic investors.<\/p>\n\n\n\n<p>Example: A company may issue non-voting equity shares to investors who only seek dividends and capital gains.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-9-convertible-amp-non-convertible-shares\">9. Convertible &amp; Non-Convertible Shares<\/h4>\n\n\n\n<p>Convertible shares allow shareholders to convert them into preference shares or another class of equity after a certain period.<\/p>\n\n\n\n<p>Non-convertible shares cannot be converted into any other type of stock.<\/p>\n\n\n\n<p>Example: Convertible equity shares in a startup may turn into preference shares if specific financial targets are met.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-10-preference-shares\">10. Preference Shares<\/h3>\n\n\n\n<p>Preference shares, as the name suggests, offer shareholders preference over equity shareholders. These shareholders receive dividends before equity shareholders and have a higher claim on the company&#8217;s assets in case of liquidation. However, preference shareholders generally do not have voting rights.<\/p>\n\n\n\n<p><strong>Features of Preference Shares<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Regular dividend payments<\/li>\n\n\n\n<li>Lower risk compared to equity shares<\/li>\n\n\n\n<li>No voting rights in most cases<\/li>\n\n\n\n<li>Priority over equity shareholders on company assets<\/li>\n<\/ul>\n\n\n\n<p><strong>Read Also:<\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/stocks-vs-bonds\/\"> Stocks vs Bonds: Difference Between Bonds and Stocks<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-types-of-preference-shares\"><span class=\"ez-toc-section\" id=\"Types_of_Preference_Shares\"><\/span>Types of Preference Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Preference shares are a hybrid between equity and debt. They provide fixed dividends (similar to coupon payments of bonds) and have the potential to provide capital appreciation (similar to equity). They have priority over equity shares in dividends but usually do not carry voting rights.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-1-cumulative-preference-shares\">1. Cumulative Preference Shares<\/h4>\n\n\n\n<p>Cumulative preference shares allow unpaid dividends to accumulate and be paid later when the company becomes profitable.<\/p>\n\n\n\n<p>Example: If a company skips a \u20b95 dividend payout in Year 1, it must pay \u20b910 in Year 2 (\u20b95 for Year 1 + \u20b95 for Year 2).<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-2-non-cumulative-preference-shares\">2. Non-Cumulative Preference Shares<\/h4>\n\n\n\n<p>Non-cumulative preference shares do not give unpaid dividends of previous years. If the company fails to pay dividends in a particular year, shareholders don\u2019t get that dividend in the following years.<\/p>\n\n\n\n<p>Example: If the company didn\u2019t pay dividends in 2024, shareholders cannot claim them in 2025 and afterward.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-3-participating-preference-shares\">3. Participating Preference Shares<\/h4>\n\n\n\n<p>Participating preference shareholders receive fixed dividends under normal circumstances but have a claim on the company&#8217;s excess earnings if the company makes excess profits.<\/p>\n\n\n\n<p>Example: If the company generates excess profit, a percentage of that profit is paid to these shareholders in addition to the fixed dividend.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-4-non-participating-preference-shares\">4. Non-Participating Preference Shares<\/h4>\n\n\n\n<p>Non-participating preference shareholders only receive the fixed dividend and do not get extra dividends, even if the company performs exceptionally well.<\/p>\n\n\n\n<p>Example: A non-participating preference shareholder receives only a fixed dividend, regardless of the company&#8217;s additional profits.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-5-convertible-preference-shares\">5. Convertible Preference Shares<\/h4>\n\n\n\n<p>Convertible preference shares can be converted into equity shares after a certain period.<\/p>\n\n\n\n<p>Example: A preference shareholder gets the option to convert their shares into equity shares after 5 years.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-6-non-convertible-preference-shares\">6. Non-Convertible Preference Shares<\/h4>\n\n\n\n<p>Non-convertible preference shares cannot be converted into equity shares and remain preference shares.<\/p>\n\n\n\n<p>Example: Investors holding non-convertible shares can only sell them to others and cannot convert them into equity shares.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-7-redeemable-preference-shares\">7. Redeemable Preference Shares<\/h4>\n\n\n\n<p>Redeemable preference shares can be bought back by the company at the maturity date at a predetermined price.<\/p>\n\n\n\n<p>Example: A company issues redeemable shares at \u20b9100 per share, with a buyback price of \u20b9120 after 5 years.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-8-irredeemable-preference-shares\">8. Irredeemable Preference Shares<\/h4>\n\n\n\n<p>Irredeemable preference shares do not have a redemption date and can be held by investors indefinitely.<\/p>\n\n\n\n<p>Example: Investors continue to receive fixed dividends without a repurchase obligation from the company.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-medium-font-size\" id=\"h-9-adjustable-rate-preference-shares\">9. Adjustable-Rate Preference Shares<\/h4>\n\n\n\n<p>The dividend rate on adjustable-rate preference shares changes based on benchmark interest rates or other financial indicators.<\/p>\n\n\n\n<p>Example: If inflation rises, adjustable-rate shares may increase dividends from 6% to 7%.<\/p>\n\n\n\n<p><strong>Read Also: <\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/what-is-earnings-per-share-eps\/\">What is Earnings Per Share (EPS)?<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-key-differences-between-equity-and-preference-shares\"><span class=\"ez-toc-section\" id=\"Key_Differences_Between_Equity_and_Preference_Shares\"><\/span>Key Differences Between Equity and Preference Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table class=\"has-fixed-layout\"><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">Feature<\/th><th class=\"has-text-align-left\" data-align=\"left\">Equity Shares<\/th><th class=\"has-text-align-left\" data-align=\"left\">Preference Shares<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\">Dividend Payment<\/td><td class=\"has-text-align-left\" data-align=\"left\">Variable, based on profit<\/td><td class=\"has-text-align-left\" data-align=\"left\">Fixed&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Voting Rights<\/td><td class=\"has-text-align-left\" data-align=\"left\">Yes<\/td><td class=\"has-text-align-left\" data-align=\"left\">No, in most cases<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Risk Level<\/td><td class=\"has-text-align-left\" data-align=\"left\">High<\/td><td class=\"has-text-align-left\" data-align=\"left\">Lower<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Convertibility<\/td><td class=\"has-text-align-left\" data-align=\"left\">Non-convertible<\/td><td class=\"has-text-align-left\" data-align=\"left\">Convertible (in some cases)<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Liquidation Preference<\/td><td class=\"has-text-align-left\" data-align=\"left\">Last claim on assets<\/td><td class=\"has-text-align-left\" data-align=\"left\">Higher claim than equity shareholders<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-understanding-share-types-is-important-for-investors\"><span class=\"ez-toc-section\" id=\"Why_Understanding_Share_Types_is_Important_for_Investors\"><\/span>Why Understanding Share Types is Important for Investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Choosing between equity and preference shares depends on your risk appetite, investment goals, and expected returns. Here\u2019s why understanding different types of shares matters:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Risk Management:<\/strong> Helps in selecting stocks based on risk tolerance.<\/li>\n\n\n\n<li><strong>Portfolio Diversification:<\/strong> Mixing equity and preference shares while building your portfolio can balance risk and returns.<\/li>\n\n\n\n<li><strong>Dividend Strategy:<\/strong> Preference shares are better for steady income, whereas equity shares can provide higher growth.<\/li>\n\n\n\n<li><strong>Voting Rights:<\/strong> Investors who want voting rights in company matters should opt for equity shares.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Understanding the types of shares is essential for making sound investment decisions. Equity shares offer higher returns but come with greater risks, while preference shares provide stable income in the form of dividends with lower risks. Depending on your financial goals, you can choose a mix of both to build a balanced portfolio.<\/p>\n\n\n\n<p>Before investing, always conduct thorough research and, if needed, consult a financial advisor for expert guidance.<\/p>\n\n\n\n<p><strong>Read Also:<\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/stock-splits\/\"> What are Stock Splits? Meaning, Reason, Types, and Impact Explained<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions-faqs\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3 class=\"\">Which type of share is better for beginners?<\/h3><p class=\"saswp-faq-answer-text\">Beginners looking for stability may opt for preference shares, while those willing to take risks for higher returns can invest in equity shares.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Can preference shares be converted into equity shares?<\/h3><p class=\"saswp-faq-answer-text\">Yes, convertible preference shares can be converted into equity shares after a specific period.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Do all companies issue preference shares?<\/h3><p class=\"saswp-faq-answer-text\">No, not all companies issue preference shares. It depends on the company\u2019s financial strategy for raising funds and managing cash outflows.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Are equity shares a good long-term investment?<\/h3><p class=\"saswp-faq-answer-text\">Yes, equity shares have historically provided high returns in the long run, but they can have high risks.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">What happens to my shares if the company goes bankrupt?<\/h3><p class=\"saswp-faq-answer-text\">In case of liquidation, preference shareholders are paid before equity shareholders, but creditors and bondholders take priority over both.<\/p><\/ul><\/div>","protected":false},"excerpt":{"rendered":"<p>When investing in the stock market, understanding the types of shares is crucial for making informed investment decisions. Shares represent ownership in a company and provide investors with certain rights, such as voting and dividend income. Companies issue different types of shares to meet their capital requirements, each offering different benefits to investors. This guide [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":15802,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"is_paper_insight":false,"paper_insight_image":0,"paper_insight_pdf":0,"paper_insight_ppt":0,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-12032","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"acf":{"freelancer":"Harjyot"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.13 (Yoast SEO v21.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Types of Shares Explained \u2013 Equity &amp; Preference Shares Guide<\/title>\n<meta name=\"description\" content=\"Learn about different types of shares, including equity and preference shares. Understand their features, benefits, and how they impact investors.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What are the Different Types of Shares\u00a0\" \/>\n<meta property=\"og:description\" content=\"Learn about different types of shares, including equity and preference shares. Understand their features, benefits, and how they impact investors.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/\" \/>\n<meta property=\"og:site_name\" content=\"Pocketful\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Pocketful.HQ\/\" \/>\n<meta property=\"article:published_time\" content=\"2025-02-28T08:34:23+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-06-06T12:25:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/wp-api.pocketful.in\/blog\/wp-content\/uploads\/2025\/02\/Different-Types-of-Shares-.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1497\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Harjyot Singh\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Pocketful_HQ\" \/>\n<meta name=\"twitter:site\" content=\"@Pocketful_HQ\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Harjyot Singh\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Types of Shares Explained \u2013 Equity & Preference Shares Guide","description":"Learn about different types of shares, including equity and preference shares. Understand their features, benefits, and how they impact investors.","robots":{"index":"noindex","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"og_locale":"en_US","og_type":"article","og_title":"What are the Different Types of Shares\u00a0","og_description":"Learn about different types of shares, including equity and preference shares. Understand their features, benefits, and how they impact investors.","og_url":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/","og_site_name":"Pocketful","article_publisher":"https:\/\/www.facebook.com\/Pocketful.HQ\/","article_published_time":"2025-02-28T08:34:23+00:00","article_modified_time":"2025-06-06T12:25:03+00:00","og_image":[{"width":1497,"height":1080,"url":"https:\/\/wp-api.pocketful.in\/blog\/wp-content\/uploads\/2025\/02\/Different-Types-of-Shares-.jpg","type":"image\/jpeg"}],"author":"Harjyot Singh","twitter_card":"summary_large_image","twitter_creator":"@Pocketful_HQ","twitter_site":"@Pocketful_HQ","twitter_misc":{"Written by":"Harjyot Singh","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#article","isPartOf":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/"},"author":{"name":"Harjyot Singh","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/person\/fab7cd78b9309e1522928a9e8bf6371d"},"headline":"What are the Different Types of Shares\u00a0","datePublished":"2025-02-28T08:34:23+00:00","dateModified":"2025-06-06T12:25:03+00:00","mainEntityOfPage":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/"},"wordCount":1435,"publisher":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#organization"},"articleSection":["Investing"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/","url":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/","name":"Types of Shares Explained \u2013 Equity & Preference Shares Guide","isPartOf":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#website"},"datePublished":"2025-02-28T08:34:23+00:00","dateModified":"2025-06-06T12:25:03+00:00","description":"Learn about different types of shares, including equity and preference shares. Understand their features, benefits, and how they impact investors.","breadcrumb":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/wp-api.pocketful.in\/blog\/different-types-of-shares\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog Home","item":"https:\/\/wp-api.pocketful.in\/blog\/"},{"@type":"ListItem","position":2,"name":"What are the Different Types of Shares\u00a0"}]},{"@type":"WebSite","@id":"https:\/\/wp-api.pocketful.in\/blog\/#website","url":"https:\/\/wp-api.pocketful.in\/blog\/","name":"Pocketful blog","description":"Learn Stock market trading, investing &amp; more","publisher":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/wp-api.pocketful.in\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/wp-api.pocketful.in\/blog\/#organization","name":"Pocketful","alternateName":"Pocketful Broker","url":"https:\/\/wp-api.pocketful.in\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/cms-resources.pocketful.in\/blog\/wp-content\/uploads\/2023\/08\/Logo_Final-01-1-3-1.png","contentUrl":"https:\/\/cms-resources.pocketful.in\/blog\/wp-content\/uploads\/2023\/08\/Logo_Final-01-1-3-1.png","width":150,"height":26,"caption":"Pocketful"},"image":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Pocketful.HQ\/","https:\/\/twitter.com\/Pocketful_HQ","https:\/\/www.linkedin.com\/company\/pocketfulofprofits\/","https:\/\/www.instagram.com\/pocketful.official\/"]},{"@type":"Person","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/person\/fab7cd78b9309e1522928a9e8bf6371d","name":"Harjyot Singh","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/61f879232c91ea73705cac5ebd9d45634f953b4f93b5d56bb8a22494a85a7a55?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/61f879232c91ea73705cac5ebd9d45634f953b4f93b5d56bb8a22494a85a7a55?s=96&d=mm&r=g","caption":"Harjyot Singh"}}]}},"associated_menu_id":null,"article_history_entries":[{"type":"Edit","author":{"id":7,"name":"Pocketful Team","url":"pocketful"},"content":"Post created","date":"2024-11-11 10:35:09","id":"ah_6731dddd83d4a6.41000886"}],"is_paper_insight":false,"image_url_featured":"https:\/\/cms-resources.pocketful.in\/blog\/wp-content\/uploads\/2025\/02\/Different-Types-of-Shares-.jpg","_links":{"self":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/posts\/12032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/comments?post=12032"}],"version-history":[{"count":1,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/posts\/12032\/revisions"}],"predecessor-version":[{"id":18720,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/posts\/12032\/revisions\/18720"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/media\/15802"}],"wp:attachment":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/media?parent=12032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/categories?post=12032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/tags?post=12032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}