Which investment form normally participates in surplus capital?

The participation in surplus capital typically refers to the ability of an investment form to receive distributions from a company's remaining assets after all liabilities and obligations have been settled, particularly during a winding-up or liquidation scenario. Ordinary shares have a residual claim on the company’s assets, meaning they are last in line to be paid out after all debts and preferential claims have been addressed.

When a company is liquidated, it first satisfies its secured creditors, such as those holding debentures secured by either a fixed or floating charge. Following this, if there are remaining assets, preference shareholders will receive their entitlements, which are typically fixed dividends and a return of capital. Only after all these obligations are fulfilled do ordinary shareholders have the right to any surplus capital. Hence, they participate directly in any remaining assets, making them the correct answer to the question regarding participation in surplus capital.

This characteristic of ordinary shares exemplifies their nature as equity instruments that carry more risk but also the potential for greater returns in the event of surplus capital distribution. Given their position in the hierarchy of claims, they are the primary beneficiaries of any residual assets left over after all other claims have been satisfied.