• Shares are a way for a company to raise capital.
• A share represents an ownership interest in the company.
• Shareholders may receive profits through dividends.
• Other sources of finance include:
  • Bank loans.
  • Debentures.
  • Retained profits.

Ordinary Shares

• Also called equity share capital.
• Ordinary shareholders receive dividends after preference shareholders.
• Usually carry voting rights.
• Generally represent a riskier investment than preference shares.
• Shareholders may vote to remove directors where appropriate.

Debentures

• Not share capital.
• They are part of loan capital.
• Debenture holders lend money to the company.
• They receive interest, not dividends.
• They are not shareholders and normally have no shareholder voting rights.

Preference Shares

• Provide a preferred fixed dividend.
• Dividends are paid before ordinary shareholders.
• They remain shares, not loans.
• Holders receive dividends, not interest.
• They may not receive dividends if the company makes no profit.
• Often do not carry voting rights.
• Their rights are determined by the company's Articles.