Ordinary Shares

Ordinary shares, also known as common shares, represent ownership in a company and entitle shareholders to vote on important company decisions, such as electing the board of directors and approving mergers. Ordinary shareholders typically have the right to receive dividends, although these are not guaranteed and are paid after preferred shareholders. In the event of liquidation, ordinary shareholders are last in line to receive any remaining assets.

Example

An investor buys 1,000 ordinary shares in a technology company, giving them voting rights and the potential to receive dividends based on the company’s financial performance.