Preference shares are a share class that gives the owner priority to dividends over other shares, often up to a set amount. In return, preference shares usually carry lower voting rights than common shares.
Preference shares are often used to raise capital without existing owners losing control, or to give investors a safer return. The rights that apply are set out in the articles of association and must be reflected in the share ledger.
Common shares are the most usual shares in a company and normally carry full voting rights.
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Share class refers to different types of shares in a company, e.g. A and B shares, with different rights.
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A dividend is when a limited company distributes part of its profit to its shareholders.
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Voting rights are a shareholder's right to vote at the general meeting, often depending on share class.
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