There are two main categories of shares, namely ordinary and preferential shares.
· Ordinary shares are the most common type of shares and usually have voting rights. This means that the shareholder can have a say in the running of the company by voting at shareholder meetings.
· There are many types of preferential shares namely: convertible, redeemable, cumulative etc. Preferential shares essentially mean they have preferential rights over ordinary shares. An example would be if a company is liquidated preferential shares get paid out in full before ordinary shares so if there is any money left the ordinary shareholder may not get paid. However, preference shares do not normally have voting rights.