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CSEET · Fundamentals of Accounting · Introduction to Company Accounts

Under the Companies Act, 2013, the share capital of a company limited by shares can be of which two kinds?

A company limited by shares can have only equity share capital and preference share capital. Equity capital may carry voting rights or differential rights, while preference capital carries preferential rights. Authorised, called-up and paid-up describe stages of capital, not its statutory kinds.

  1. AEquity share capital and preference share capitalCorrect
  2. BAuthorised capital and issued capital
  3. CFixed capital and fluctuating capital
  4. DCalled-up capital and paid-up capital

Explanation

Section 43 states that the share capital of a company limited by shares is of two kinds: equity share capital (with voting rights or with differential rights) and preference share capital. Authorised, issued, called-up and paid-up are stages or descriptions of capital, not the statutory kinds.

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