Non-participating shares do not provide their holders with a share of the earnings of the issuing entity. Instead, these shares typically provide a fixed rate of return in the form of a dividend, and so are designated as preferred shares. These shares are less risky than common stock, since holders will still earn a return even when the issuing business does not earn a profit. Also, this dividend is paid before common shareholders are paid a dividend; this preference further reduces the risk to the holder. In exchange for this reduced level of risk, shareholders do not participate in the earnings of the issuer, which caps their maximum return.