In principle, whether a share is traded or not, it would usually have similar voting rights and access to dividends in the case of common equity. There are preferred shares which usually earn higher "dividends" that may be fixed or variable but without the voting rights. At the time of privatisation, the golden share was created for a limited period to give the government continued control over certain decisions.

In effect, the practical difference between a traded or non-traded shares are its ability to be bought or sold in a stock market or exchange. This means that traded shares has more liquidity and readily transferrable. In some cases, traded shares are sold at a premium over non-traded shares, given that they could be bought and accumulate that could result in a controlling stake in a company.

The opposite is true for non-traded shares. In some cases, a block of non-traded shares that confer control over a company could be very valuable, given that by selling, the seller confers a controlling interest to the buyer. 

Non-traded shares could be listed in a stock exchange in order to gain liquidity. The company seeking listing would have to comply with the listing requirements of each of the stock exchange where it seeks to be traded.

This is what happened in a number of family-owned corporations. A portion of the shares are listed, while the controlling families hold on to a controlling stake.

Trust this clarifies.

Do not confuse "tradable" and "common".  Most privately-held companies have shares which are not traded on stock exchanges.  They may be traded privately; that issue is usually covered in the Articles of Association.   Every country has its rules for issuing shares, either when a company is founded or its capital increased.  They involve a notary or lawyer, and the Registry of Commerce.

Roy

thank you so much but let it clear more..

i passed through a paper in which cash dividend was used as a proxy for tunneling, supported by the argument that controlling shareholder hold non tradable share at low or zero price and are not traded in stock market, so announcing cash dividend benefits more to controlling shareholder because of that non tradable share so my question was that either it exist in each company or not and what are the criteria of issuing such shares.

thanks

Every Corporate firm is required to issue share for the first time in favor of promoters. So, shares being issued to the promoters will remain non-tradable till the issue of shares to the primary market and getting listed on the stock exchange irrespective of firms. Off course, promoters or entrepreneurs can sell shares on the OTC market if law permits.

thank you sir, Mohammad Saleh Jahur ·

as for as non tradable share remain with the promoter than does it receive cash dividend if announce by the company ?

I'd ask whether the the shares you are talking of are really "non-tradable" or merely "non-traded" by decision of the shareholder.  Frankly I don't understand what you mean by "tunnelling" or "promoter".  Does the latter mean "founder"? 

Often shares are untradable (in the sense of stock exchange trading) by virtue of rules about directors' share holdings.  In the USA they talk of a "window" for trading.  It's all because of insider trading laws.  There are companies that issue tradable and non-tradable classes of shares, but this practice is fading away.  Roy

Wajid, Under US, UK and Australian law a company can have different classes of shares (eg ordinary, preference, A, B, C etc) and declare different rates of dividend (including zero rate) for each of its different classes of shares.  The different classes of shares will be explained in the company's own rules, usually the Articles of Association.  So with reference to your question, if I have understood it correctly, if the "promoter's" share belongs to its own share class within the company's Articles then yes it can have its own cash dividend rate.  Hope that helps!

anyone who suggest me a relevant paper regarding non tradable share which can help me more. plz...