Differences Between Equity and Preference Shares

Basis	Equity Shares	Preference Shares
Dividend	Equity shares are that type of shares in which the dividend amount paid to equity shareholders are not fixed.	Preference shareholders are that type of shares in which the dividend amount paid to preference shareholders are fixed.
Cumulative Dividend	The equity shareholders do not receive the dividend amount of current year in coming year if the company default to pay.	There may be a provision for the preference shareholders to get the dividend amount of current year in coming year in case of default in payment.
Priority	Equity shareholders receive dividend only after preference shareholders and debt holders receive.	For distribution of dividend and redemption of capital, first priority is given to the preference shareholders.
Redemption	The capital amount of equity shareholders is only returned back when the company is liquidated or reformulated.	The amount invested by the preference shareholders is returned after the expiration of specific period.
Voting right	The equity shareholders have right to select their representative for the management of organization in Annual General Meeting. It means that they have voting right.	The preference shareholders may have voting right in some special situation only.