Home » Eng Finance » S » Shares: ordinary

Shares: ordinary

These have no particular right to dividend but are entitled to all the profits after prior demands, such as loan interest or preference dividends. However, whether and when they receive the profits is at the discretion of the directors, who may if they wish put all profits into reserve. The ordinary shareholders are the true owners of a company. The directors are, strictly speaking, stewards. The shareholders meet at least once a year and may put forward any resolution that they wish, provided that certain legal conditions are complied with.

Reference: The Penguin Business Dictionary, 3rd edt.