Question 51. What are common and preferred shares?

Unless otherwise stipulated in the articles of association of a joint stock company, the shares provide equal voting rights and the right to benefit from profits at the same rate. These are called “Ordinary Shares”.

“Preferred Shares”, on the other hand, arise when the share certificates are divided into two or more groups by the articles of association of the companies and stock groups with privileged rights are created in the half of the Ordinary Shares.

For example, in the establishment of the company, the shares owned by the founders may be given privileges in profit distribution by the articles of association. Multiple voting rights may be granted in voting.

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