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CMA Intermediate · Business Laws and Ethics · Rights of Shareholders

Under section 43 of the Companies Act, 2013, which describes the kinds of share capital of a company limited by shares?

Share capital of a company limited by shares is of two kinds: equity share capital, either with voting rights or with differential rights as to dividend, voting or otherwise as prescribed, and preference share capital. Debentures do not form part of share capital.

  1. AEquity share capital, which may carry voting rights or differential rights as to dividend, voting or otherwise, and preference share capitalCorrect
  2. BEquity share capital and debenture capital
  3. CPreference share capital and redeemable capital only
  4. DVoting share capital and non-voting capital only, with no preference shares

Explanation

Section 43 states that share capital is of two kinds: equity share capital (with voting rights, or with differential rights as to dividend, voting or otherwise as prescribed) and preference share capital. Debentures are not share capital.

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