Shares can be widely divided into two categories namely, ordinary shares and preference shares.
Ordinary shares carry no exceptional or preferred rights. Ordinary shareholders are entitled to share in the earnings of the company. They can vote at the company’s general meeting as well as other official meetings. They are also eligible to participate in any dividends or any distribution of assets on winding up of the company.
Preference shareholders usually get a significance or 'priority' over ordinary shareholders in terms of payments of dividends or on winding up of the company. There are varying degrees of preference shares having different rights and characteristics. Holders of preference shares are entitled to having a fixed periodic income and have restricted voting rights liable to particular circumstances or particular resolutions; however this is strictly dependent on the terms of the shares.