Skip to content

CS Executive · Company Law and Practice · Share and Share Capital - Concepts

Meghdoot Textiles Ltd, a company limited by shares, has issued shares of various kinds. Under Section 43 of the Companies Act, 2013, which pair correctly names the two kinds of share capital a company limited by shares may have?

A company limited by shares can have only two kinds of share capital under Section 43: equity share capital and preference share capital. Voting rights or differential rights are features of equity, while debentures are debt and reserve capital is a separate concept.

  1. AEquity share capital and preference share capitalCorrect
  2. BVoting share capital and non-voting share capital
  3. CPreference share capital and debenture capital
  4. DEquity share capital and reserve share capital

Explanation

Section 43 says the share capital of a company limited by shares shall be of two kinds: equity share capital and preference share capital. Voting and non-voting are features within equity, not separate kinds. Debenture capital is debt, and reserve capital is a different concept under Section 65.

Did you get it right without looking?

One question tells you little. A timed set on Share and Share Capital - Concepts shows your real accuracy, how long you take and where you lose marks.

Practise Share and Share Capital - ConceptsFree diagnostic mock

More Share and Share Capital - Concepts questions