That part of a company's share capital which carries preferential rights to dividend at a fixed rate and re-payment of capital in case of winding-up of the company are termed as preference shares.
The preference shares convertible at a later date into equity shares are known as convertible preference shares. Preference shares minus any conversion option are known as non-convertible preference shares.
Apreference share carries voting rights only with respect to matters which directly affect the rights of the preference shareholders. It is because of this limitation on voting rights that a preference shareholder does not have much control over the company.
