• It is a permanent finance to the company which can be refunded only during liquidation.
• It is the largest source of finance to the Ltd Company.
• This finance has a residual claim on profits and assets during liquidation.
• Ordinary share capital is entitled to voting powers, each share usually being equal to one vote.
• This finance carries a varied return i.e. its dividends will vary with the profits made.
• Ordinary share capital carries no nominal cost to the company. i.e. dividends on ordinary share
capital are not a legal obligation to the company to pay.
• It is the only finance which will grow with time as a result of retention.
• This finance cannot force the company into liquidation i.e. it does not increase its gearing; on the
contrary, it decreases the gearing.
• It can be raised by limited companies only.
NatalieR answered the question on February 9, 2022 at 07:44