Deferred shares are also called as founder shares because these shares were normally issued to founders. The shareholders have a preferential right to get dividend before the preference shares and equity shares. No Public limited company or which is a subsidiary of a public company can issue deferred shares. This shares are issued to the founder shares to control over the management by the virtue of their voting rights.
The holder of deferred shares are not entitled to the assets of a company, undergoing bankruptcy, until all common and preferred shareholders are paid. This provision is applicable for dividend also. Deferred shareholders are restricted to receipt dividend until dividend have been distributed to all other classes of shareholder.
Normally, deferred shares are issued by such companies undergoing capital restructuring processes. Capital restructuring occurs to change capital position or debt-equity ratio of the company. Capital restructuring is also used by the companies as part of a long term strategy to make the business more competitive and sustainable.
However, Deferred shareholders get whatever remains after liquidating the company and paying off company debts.