Section 43 — Kinds of share capital

The share capital of a company limited by shares shall be of two kinds,
namely:—
(a) equity share capital—
(i) with voting rights; or
(ii) with differential rights as to dividend, voting or otherwise in accordance with such rules as
may be prescribed; and
(b) preference share capital:
Provided that nothing contained in this Act shall affect the rights of the preference sha re holders who
are entitled to participate in the proceeds of winding up before the commencement of this Act.
Explanation.—For the purposes of this section,—
(i) “equity share capital”, with reference to any company limited by shares, means all share capital
which is not preference 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;

(iii) capital shall be deemed to be preference capital, notwithstanding that it is entitled to either or
both of the following rights, namely:—
(a) that in respect of dividends, in addition to the preferential rights to the amounts specified in
sub-clause (a) of clause (ii), it has a right to participate, whethe r fully or to a limited extent, with
capital not entitled to the preferential right aforesaid;
(b) that in respect of capital, in addition to the preferential right to the repayment, on a winding