These are shares which gives the voting rights. So the equity shareholders are the real owners of the company as they participate in decision making. The voting rights are proportionate to the shares held with respect to the total equity share capital of the company.
Equity shareholders can get the dividend only after the dividend is paid to the preference shareholders. So in this respect they carry higher risk in times of insufficient profits.
But once the dividend is paid to the preference shareholders then the remaining profits belong to equity shareholders. So they get higher returns in times of bumper profits.
Equity shareholders also do not carry any preferential rights of repayment at the time of winding up of the company. They will be paid only if funds are left after making repayment to the preference shareholders. So they carry higher risk of losing their money in case of winding up of the company.
In our day to day life we hear that people are buying and selling shares or trading in share market. Please understand that these are equity shares and are not preference shares.
Equity share does not carry any fix rate of dividend and the rate of dividend is recommended by Board of directors every year depending upon the profits for the year and few other considerations.
