Ordinary shares
Ordinary shares are equity instruments that normally carry voting rights and a residual interest in the company's assets. An ordinary shareholder's return can arise from dividends and changes in the value of shares. A company may issue shares at a price exceeding nominal value, recording the excess as share premium. Exact voting and dividend rights depend on the share terms. The terms attached to a particular class may modify the ordinary rights described here.
Worked example
Owners receive dividends if declared and share remaining assets after liabilities on liquidation.
Common mistake
Dividends are not guaranteed and ordinary shareholders rank behind creditors.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: Ordinary share, Common shares