Features.

he important features of preference shares are:

1. Fixed return. The preference shareholders get the first preference to share the profits of a company. Their income is fixed, as a fixed rate of dividend is paid on preference shares.
2. Return of capital. The preference shareholders have a preferential right to get back their capital at the time of winding up of the company.
3. Fixed dividend. As per terms of issue and as per Articles of Association, they shall have a fixed rate of dividend. Hence, they are called fixed income securities.
4. Non-participation in prosperity. The preference shareholders cannot participate in the surplus profits of the company, unless they are participating in preference shares.
5. Non-participation in management. The preference shareholders do not have voting right and, hence, they do not participate in the management of the company.