普通股优缺点Prosandconsofordinaryshare.doc

Term Paper for Graduate Students Pros and cons of ordinary share Course Business Law Name Zhang Mohan Number 2012265 Date 2013.12 Abstract Ordinary share is the foundation of companys capital structure and a basic form of stock. In this paper, we discuss the definition of ordinary share first, then come to the rights and obligations of ordinary share. We focus on the pros and cons of ordinary share mainly from financing perspective and compare with the preference share at last. Above all,we give some advise to corporate financing. The definition of ordinary share According to the company law, ordinary share is a kind of stock to enjoy common rights in corporate management and the allocation of profit and property. It represents the residual claims of company earings and property after satisfying all claims of reimbursement requirements and preferred shareholders rights. Ordinary share is the foundation of companys capital structure and a basic form of stock. It’s also the largest circulation share, the most important stock, which is also called common stock. At present, traded on the Shanghai and Shenzhen Stock Exchange, are all common stocks. The rights and obligations of ordinary shares. 2.1.The rights of ordinary shares Ordinary share holders enjoy the following basic rights based on their proportion of shares: The voting rights to participate in company’s business. Ordinary shareholders generally have the right to attend the general meeting of shareholders, voting, to elect and to be elected. Also they can indirectly participate in the companys business. The distribution rights of profit. Ordinary shareholders have the right to get dividends from the company profit distribution. Ordinary share dividend is not fixed, assigned by the companys profit situation and its policy decisions. Common shareholders shall have the right to enjoy the dividend distribution must after preferred shar