Preference shares are shares which are preferred over common or equity shares in payment of surplus. Owners of preference shares get fixed dividend. However, in the event of liquidation of the company they are paid after bondholders and creditors, but before equity holders. Different types of preference shares include cumulative preference share, non-cumulative preference shares, redeemable, non-redeemable and convertible preference shares. Redeemable preference shares are ones that can be redeemed or repaid after the fixed period as issued by the company. Take a look at this sample agreement template for redeemable preference shares to better understand the mechanics of such issuance. You could have such agreements prepared for incoming investors or in general to better structure your company. Evaluer has helped many companies in Chandigarh, Mohali, and Panchkula to prepare documents as per applicable laws in India and the Union Territory of Chandigarh / Tricity.
