Features of Equity Share Capital

Equity share capital refers to those funds which are invested by the public and promoters into the company for a long period of time. Given below are some of the features of equity share capital –

  1. Those who invest in Equity share capital are known as equity shares holders.
  2. It is considered to be the most risky investment, but at the same time it has the history of generating superior returns when one compares it with other alternatives of investment
  3. They have right to vote on all important matters relating to company which ranges from decision on appointment of directors, declaration of dividend, acquisition of new company and so on.
  4. They are entitled to have profits shared with them in the form of dividend after company has paid out all its expenses like depreciation, interest, administrative expense, selling and distribution expenses etc…, and dividend to preference share holders.
  5. The liability of equity share capital is limited in the sense that one who holds equity of the company can lose only that amount which he or she has invested and the creditors of the company cannot held the shareholder personally responsible for the debts of the company.
  6. If the company goes bankrupt than in that event in case of liquidation of assets of the company equity share capital will be paid last after payment is made to creditors and preference share holders.
0 comments… add one

Leave a Comment

Related pages

substitute goods economicscharacteristics of job costingmonopolistic competition advantages and disadvantageswhat is unsystematic riskurbanisation benefitscomparative balance sheet formatskimming pricing examplepros and cons of mixed economic systemmarginal costing accountingvostro account definitiondisadvantages of monopolistic competitiondisadvantages democracythe main features of a capitalistic economic system aresemi durable goods definitionwhat is law of diminishing marginal utilitycompetitive pricing advantages and disadvantagesdisadvantages of financial statement analysisadvantages and disadvantages of advertising on the internetsubvention meaningdistinguish between systematic and unsystematic riskwhat is an example of a vertical mergersemi durable consumer goodshorizontal analysis in accountinglocational arbitrage examplefunctional departmentationlaw of diminishing marginal utility examplespricing strategies advantages and disadvantagespenetration pricing strategy pdfjournal entries for unearned revenuewhat is an autocratic leadershipdividend policies of companiesabsolute advantage formulaexamples of physical assetsdefine floating currencymeaning of forfeiting in financeskimming pricing and penetration pricinglaw of diminishing utilityjit disadvantagesexamples of capital receiptsdisadvantages of international joint venturesnormal vs inferior goodsadvantages of managerial accountingexample of prepaid expensevostrosadvantages and disadvantages of socialismsalary payable journal entryadvantages of television advertisementpenetration marketing strategy exampledifference between a finance lease and an operating leaseservice performed but unbilledprepayments journal entryzero based budgeting advantagesexamples of nondurable goodsnon redeemable preference shareswhat consignee meansdisadvantages of advertisementadvantages and disadvantages of deforestationwhat is fictitious assetscompetitive pricing advantages and disadvantagesdifference between accounts receivable and payablewho is the founder of icici bankwhat is crr and slrdisadvantage of social networkingconglomerate diversification meaningnormal goods and inferior goodsperpetual successionwhat are the disadvantages of online bankingexamples of inelasticbenefits of fifofactors that influence elasticity of demandlaw of diminished returnswhat is sundry assetswhat is an autocratic leadership stylehorizontal and vertical analysis of a financial statementwhat are some characteristics of a traditional economymateriality concept exampledisadvantages of decentralizationfictitious assetsystematic and unsystematic risk in finance