ADVANTAGES OF EQUITY SHARES

1. No compulsion for dividend:             The equity shareholders are not entitled to any return as dividend unless sufficient profits are available for the purpose & unless the Board of Directors decides to recommend the payment of dividend.

2. No charge on the assets of the company:             With an equity shares base the company can raise funds easily in the future, either by issuing preference shares or debentures, as equity shares have no charge on assets.

3. A very good source of long-term finance:             Equity shares are a very good source of long term finance.  By issuing such shares, a company can have capital permanently as it has been returned except in case of winding up of the company.

4. Equity share avoids the rigidity of fixed payments: Equity provide a company with the requisite flexibility on the disbursement of its income and avoid the rightly of fixed payments.

5. An attraction for persons of limited income: Equity shares are mostly of lower denomination, hence they can be purchased by persons of limited income.

6. Control in competent hands: The rights of various types of equity holders can be adjusted in such a way that the control may be vested in competent hands.

7. Advantages to the investors:
8. During bumper earrings, equity shareholders may get handsome dividend many times more than the fixed rate of investment.
9. Equity investors can vote on all the issues of agenda of a general meeting.