Companies release different share types depending on the reason they need to raise capital.
Each share class has different rights and requirements attached to its owner or investor.
A stockbroker is able to explain to you the benefits of each different type of share.
Ordinary shares This represents a company's major equity capital and is the most common type of stock on the Australian share market.
Shareholders are paid dividends and are given a right to vote at company meetings with their value of their vote being relative to their share holding.
Preference shares Entitlements to preferred dividend before the dividend is distributed to ordinary shareholders.
Have priority over ordinary shareholders if the company is wound up.
Trust units Property and equity trusts are common and units in these trusts perform in a similar way to ordinary shares.
Unit holders receive a distribution of profit similar to an ordinary shareholder receiving a dividend.
Contributing shares These are purchased without needing full upfront payment.
The investor has equal voting rights to ordinary shareholders and usually receives dividends on a pro rata basis.
Share buy backs A company may choose to buy back some of its own stock.
This may be done by offering shareholders to participate in selling their shares back to the company or they may acquire shares on the stock exchange just as any other investor would do.
There are numerous reasons why companies may choose to buy back their shares which can include redistributing excess funds or reducing the number of shares on issue.