Meaning & use
deferred shares
Last updated
Meanings
nounpluralbusinessfinance
Shares that give the holder no dividend or voting rights until other classes of shares have received certain payments.
Grammar: Used with a plural verb: deferred shares are issued.
Patterns
- issue deferred shares
- hold deferred shares
The company issued deferred shares to the founders so that investors could receive dividends first.
Holders of deferred shares do not get a vote at the annual meeting.
Deferred shares are often used in venture capital deals to give investors priority.
nounpluralbusinessfinance
A class of shares whose rights rank below ordinary shares, often used in employee share schemes.
Grammar: Often followed by 'in' or 'of' to specify the company: deferred shares in XYZ Ltd.
Patterns
- deferred shares in a company
- class of deferred shares
The employee was granted deferred shares that will vest over four years.
The company created a new class of deferred shares for its management team.
Deferred shares in the startup were valued at a lower price than preferred shares.
Common combinations
- issue deferred shares
- The board decided to issue deferred shares to raise capital without diluting control.
- deferred share scheme
- The deferred share scheme rewards long-term employees.
- class of deferred shares
- They created a new class of deferred shares with limited voting rights.
- hold deferred shares
- She holds deferred shares that will convert to ordinary shares next year.
Synonyms and how they differ
- preferred shares
- Preferred shares usually give priority for dividends but may have voting rights; deferred shares are lower in rank and often have no rights until others are paid.
- ordinary shares
- Ordinary shares are the most common type and typically carry voting rights and dividends; deferred shares are a special class with restricted rights.
Commonly confused: deferred shares or deferred payment?
deferred shares vs deferred payment
Deferred payment is an arrangement to pay later; deferred shares are a type of stock, not a payment method.
Practice
Which sentence uses 'deferred shares' correctly?
Choose one answer.
Deferred shares are a class of stock with restricted rights, often used to give investors priority. The other options confuse the term with deferred payment or general business actions.
Make it your own
Write a sentence using “deferred shares”, then check it and compare it with the examples above.