Winding up

Bringing the company’s life to an end by distributing all the net assets to those entitled to receive it. Also known as Liquidation.

Prior charges

All the things that rank above the equity in a winding up. (i.e. these will get paid out first and there may or may not be anything left for the equity holders). For example, debts and liabilities must first be settled before the final payout can be calculated.

Capital shares

Shares that get the left over assets on a winding up but do not get a dividend.

Zero dividend preference shares

Zero dividend preference shares (ZDP) are Shares that will be redeemed at a fixed price at some defined point in the future (provided that sufficient assets are available). Their entitlement to the assets of the company rises in a straight line between their entitlement on issue and their redemption value. They are not entitled to […]

Preference shares

Preference shares earn a preferred return, usually a fixed dividend, and usually also have a fixed entitlement on a winding up. They will usually get paid out before the ordinary shares on a winding up. Click here to subscribe for free equity research on investment trusts, funds and listed companies.

Ordinary income shares

Shares that get a dividend and get what is left of the assets on a winding up. Also known as Geared ordinary shares.

Geared ordinary shares

Shares that get a dividend and get what is left of the assets on a winding up. Also known as Ordinary income shares.

Income shares

Shares that give a preferential right to income, this might be all the income or a percentage, these may have a fixed entitlement on a winding up.

Liquidation

Bringing the company’s life to an end by distributing all the net assets to those entitled to receive it. Also known as Winding Up.

Additional Tier 1 or AT1

Additional Tier 1 or AT1 In addition to a bank’s core capital or Tier 1 capital, it may also use other additional forms of capital to ensure its capital adequacy. Tier 1 capital is used to describe the capital adequacy of a bank and is the core capital that includes equity capital and disclosed reserves. […]

Glossary

Winding up