Ordinary Shares vs Preference Shares

	Ordinary Shares	Preference Share
General	Most common type of shares issued. They are generally regarded as equity investments	A preference share is a share by whatever name called, which does not entitle the holder to a right to vote or to participate beyond a specific amount in distribution of dividend, redemption or winding up. Preference shares can have both equity and debt characteristics, favoured by investors who have different priorities and interests to safeguard.
Types	Voting - Non-Voting	Redeemable - Convertible - Cumulative
Uses/Holders	Suitable for parties that wish to exert some control (voting), participate in earnings (dividends) and growth (capital) of the company.	Preference shares are a useful investment tool for parties with the following objectives & requirements: • Investors who do not require voting rights and involvement in management of company; • Investors opting for medium risks and returns (lower risks compared to ordinary shareholders as preference shareholders have priority of receiving payment of dividends and capital); or • Investors who prefer a hybrid debt (with predictable/fixed returns) and equity investment exposure.