What is share structure?
Share structure is how a company decides to distribute different types of shares to its shareholders, which affects who controls the company and how much money shareholders can make from owning these shares. There are several kinds of shares, like common shares, preferred shares, and non-voting shares, each with its own benefits and rights.
For instance, a company might give out preferred shares that let investors get dividends (a share of the company's profits) before the common shareholders get theirs. This is especially beneficial in Canada because the government can tax these dividends at a lower rate than other types of income.
By smartly organizing its share structure, a company can reduce the amount of taxes it and its shareholders have to pay. This not only improves the company's financial health, but also boosts the financial returns for its shareholders. The way shares are distributed plays a big role in how company profits are shared, how taxes are kept low, and who gets to make decisions in the company.