There are a number of different types of shares, most people will invest quite happily for many years without ever having to deal with anything other than common stock, but it helps to know what else is out there.

Common stocks, otherwise known as ordinary shares are the most common form of share ownership. As a common stock owner you become a part owner of the company itself, and have voting rights and entitlement to the dividend distribution (if there is one). If the company should fail common stock holders are right at the back of the queue to claim any money back if there is a distribution of assets.

Contributing shares are shares on which full payment has not yet been made.

Preference shares come in many types. Generally preference share holders are given a dividend before anyone else, and they have a priority claim if the company is liquidated. They have only limited voting rights and the dividend is usually fixed. This means that if the company does exceptionally well the common stock holders may receive more dividend money than the preference share holders.

Convertible notes are a combination of debt and equity, a type of bond stapled to a share. The investor is paid a fixed interest rate on the bond part and the rest is a share in the company. This type of share can be converted into common stock if desired. If the company does very well the share part of the convertible note will appreciate along with the common stock, but if the company does poorly the bond part will still continue to pay its interest and return the principal to the note holder on maturity. Unfortunately there is no dividend imputation on convertible notes and the market for them is much less liquid than common stock.

You will need to read the prospectus carefully with convertible notes, in practice the noteholder frequently has little say in what happens at maturity, usually the note automatically converts to common stock at expiry and if the noteholder wants cash, the stock must then be sold at market, often at a price somewhat below the cash you would get while the note-to-share conversion window was open.