Ordinary shares represent ownership in a limited liability company. Shareholders are entitled to dividends when they are declared by the company board of directors. Shareholders also have the last claim on the assets and income, after other creditors and holders of senior debt have been paid. They appoint and approve the company directors and usually have one vote for each share they hold. Ordinary shares are the most widely traded of all securities because of continuing market liquidity and the ease of ownership transfer from one investor to another. Ordinary shares are known as common stock in the US.
► See also Preference Share.
Financial and business terms. 2012.