15.2 PREFERENCE SHARES
15.2.1 Features of Preference Shares
Preference share capital also represents owner’s wealth. Like equity shares, the preference shares also too represent a permanent capital base. But they differ from equity shares, on a few counts.
Preference shareholders have a prior claim on the company’s assets in the event of liquidation.
- A particular type of the preference share, known as redeemable preference share may be, as its name suggests, redeemed by the company during its lifetime as per the terms of the issue, although the shareholders cannot force the company to go for redemption. The Indian Companies Act, 1956, provides that these share, prior to redemption, should be fully paid- up. The company will make the redemption ...
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