| Commentary

129 Preference shares

| Commentary

129 Preference shares

Preference shares commonly entitle the holder to two main rights, that is:

  1. 129.1

        to be paid a dividend of a fixed amount in priority to the payment of dividends on other classes of shares; and

  2. 129.2

        to have the capital value of the share repaid in priority to other shares in the event of the company being wound up.

The general rule is that all shares are equally entitled to capital and dividends1, but where the holder is granted preferential rights, whether as regards dividends2 or capital3, prima facie this is all he is entitled to. Thus, when

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