Many people prefer to carry on business as a corporation.
A corporation is a legal entity separate in law from its owners. As the name implies, preference shares gives the holder certain rights or privileges that the common shareholders do not enjoy. For example, the preference shareholders may be entitled to receive profits from the corporation before any money is distributed to the common shareholders. However, in order for the preference shares to enjoy this preference, the preference shares may be structured such that preference shareholders are not entitled to any voice in the decisions of the business. The combination of rights and privileges that can be attached to the share types is unlimited.