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    Question

    Preferential shares with reference to any company limited by shares, means that part of the issued share capital of the company which carries or would carry a preferential right with respect to_________________

    A Payment of dividend Correct Answer Incorrect Answer
    B Repayment of dividend as a fixed amount Correct Answer Incorrect Answer
    C Right to vote on all the resolutions passed by a company Correct Answer Incorrect Answer
    D Payment of dividend either as a fixed amount or an amount calculated at a fixed rate Correct Answer Incorrect Answer
    E All a, b & c Correct Answer Incorrect Answer

    Solution

    Companies Act  Section 43. Kinds of share capital: (ii) “preference share capital”, with reference to any company limited by shares, means that part of the issued share capital of the company which carries or would carry a preferential right with respect to— (a) payment of dividend, either as a fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income-tax; and (b) repayment, in the case of a winding up or repayment of capital, of the amount of the  share capital paid-up or deemed to have been paid-up, whether or not, there is a preferential right to the payment of any fixed premium or premium on any fixed scale, specified in the  memorandum  or  articles  of the company.

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