There are three types of preferred stock:1. Participating or Non-Participating SharesOnce the amount specified by the company has been paid to the preferred shareholder and then a certain amount to the common shareholder, there may still be additional profits which need to be decided how to share them among the shareholders. The question arises when thinking about preferred shareholders whether or not they should share in the company's surplus profits and a similar question arises: if the company is liquidated, they are known to get a share surplus profits. of the company, they are then known as participating preferred shares. But generally, the principle followed is that of non-participating preferred shares where they are not entitled to the profit distributed to them. So, generally we can say that the preferred shareholders will receive only the specified sum fixed for them and they will also have the right of participation according to the terms of the memorandum or articles of association unless otherwise stated. In the case of Scottish Insurance Corporation v. Wilsons & Cyde Coal Co Corporation: The House of Lords noted that the company's statutes were about to go into liquidation and specifically stated that in the event of liquidation, the reference shares would be given a level or priority higher. the degree of the amount paid in this respect. On the question of whether preference shareholders should be entitled to a share of excess profits, Lord Simonds said that this right would depend on the contract with the company in question and that, in such cases, preference shareholders had no right to take part of the surplus.2. Cumulative and non-cumulative actions. Preferred stock...... middle of paper ...... the preferred stock, but only public companies can do this and not limited liability companies. In the UK it is rare that a company, if it wishes, is permitted to issue convertible shares which are preferred shares which allow conversion into ordinary shares. The shareholder can make a choice on a predetermined date. Equity shares are mostly identical. what ordinary shares were, although it was not mentioned in section 86 of the Act, it was mentioned in section 86 as part of the classification of shares, but there is an undefined explanation and large share capital which is not privileged share capital. Equity capital can also be called "venture capital" because it carries many risks in case of failure of a business venture and it only obtains the rights and unused gains that other shareholders have not already obtained..