Preferred shares

Preference shares are shares that have a preferential profit entitlement. Generally, this is expressed as a percentage of the amount paid on the preference shares. This can be limited to just the nominal value, but can also include the share premium paid thereon.

In order to be able to distribute this percentage, a profit has to be made. With cumulative preference shares, if no or too little profit is made in any year, the resulting amount not paid on the preference shares must first be made up in subsequent years before any profit is paid on the other shares.

Preference shares also have ordinary meeting rights and voting rights in the general meeting of shareholders.

For more information on preference shares or other types of shares, please contact us. We will be happy to help you.