What is Equity Shares and It's Importance

Equity share also known as ordinary share and in short, it is known as Share only. The people who buy equity shares are known as Equity Shareholders. The person who is having an equity share of a company is known as the main owner of the company. This is because the equity shareholders of the company have the right to vote in the decision of the management of the company. The equity shareholders get the part of the profit in the end in the form of the dividend. And if the company does not make any profit the shareholder will not get any profit.

Advantages to the Company from Equity Shares:

1. On the equity share, the company delivers the dividend itself, if the company decides that not to give the dividend then equity shareholder does not get any dividend.
2. Equity share is the most beneficial for the company to raise capital, as there is no fixed time to return the capital on the issuance of the equity share. The equity share capital is given at the end of the company's closing.
3. Issuing an equity share does not generate any additional liability on the company's property.
4. Equity Share can be traded easily on the stock market.

Advantages to Equity Shareholders by Equity Share:

1. Equity shareholders are the real owners of the company, who have control over the affairs of the company and they have the Voting Rights.
2. There is no limit to the profit of the equity shareholder, and their obligation is equal to the shares bought by them.
3. If the company earns big profit, then it gets more benefit for the equity shareholder, the equity share price increases and the second dividend is expected to get more.