CSEET · Business Laws and Management · Elements of Company Law
Under Section 43, equity share capital with reference to a company limited by shares means:
Equity share capital means all share capital which is not preference share capital. It therefore includes shares with voting rights and shares with differential rights as to dividend, voting or otherwise, and is not limited to promoter shares or fixed-dividend shares.
- AOnly the share capital that carries voting rights
- BAll share capital which is not preference share capitalCorrect
- COnly the share capital issued to promoters
- DOnly the share capital that carries a fixed rate of dividend
Explanation
The Explanation to Section 43 defines equity share capital as all share capital which is not preference share capital. It is not confined to voting shares, since equity may also carry differential rights. A fixed dividend rate is a feature of preference capital.
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