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TYPES OF PREFERENCE SHARES

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked about 3 years ago

TYPES OF PREFERENCE SHARES

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4 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered almost 3 years ago

Types of Preference Shares are: (i) Cumulative preference shares (ii) Non-cumulative preference shares (iii) Participating preference shares (iv) Non-participating preference shares (v) Convertible preference shares (vi) Non-Convertible preference shares (vii) Redeemable preference shares

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

> Types of Preference Shares **(i) Cumulative preference shares:** A preference share is said to be cumulative when the arrears of dividend are cumulative and such arrears are paid before paying any dividend to equity shareholders. **(ii) Non-cumulative preference shares:** In the case of non-cumulative preference shares, the dividend is only payable out of the net profits of each year. If there are no profits in any year, the arrears of dividend cannot be claimed in the subsequent years. If the dividend on the preference shares is not paid by the company during a particular year, it lapses. Preference shares are presumed to be cumulative unless expressly described as non-cumulative. **(iii) Participating preference shares:** Participating preference shares are those shares which are entitled in addition to preference dividend at a fixed rate, to participate in the balance of profits with equity shareholders after they get a fixed rate of dividend on their shares. The participating preference shares may also have the right to share in the surplus assets of the company on its winding up. Such a right may be expressly provided in the memorandum or articles of association of the company. **(iv) Non-participating preference shares:** Non- participating preference shares are entitled only to a fixed rate of dividend and do not share in the surplus profits. The preference shares are presumed to be non-participating, unless expressly provided in the memorandum or the articles or the terms of issue. **(v) Convertible preference shares:** Convertible preference shares are those shares which can be converted into equity shares within a certain period. **(vi) Non-Convertible preference shares:** These are those shares which do not carry the right of conversion into equity shares. **(vii) Redeemable preference shares:** A company limited by shares, may if so authorized by its articles issue preference shares which are redeemable as per the provisions laid down in Section 80. Shares may be redeemed either after a fixed period or earlier at the option of the company. **(viii) Guaranteed preference shares:** These shares carry the right of a fixed dividend even if the company makes no or insufficient profits.

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Open uri20170510 32134 tcchcu?1494421832 Jitendra Suthar answered about 3 years ago

Hiiii friend...... **Types of Preference Shares are:** (i) Cumulative preference shares (ii) Non-cumulative preference shares (iii) Participating preference shares (iv) Non-participating preference shares (v) Convertible preference shares (vi) Non-Convertible preference shares (vii) Redeemable preference shares (viii) Guaranteed preference shares Thanks & Regards,

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered about 3 years ago

**TYPES OF PREFERENCE SHARES** Hi, The types of preference shares are as follows Cumulative preference shares Non-cumulative preference shares Redeemable preference shares Irredemable preference shares Participating preference shares Non-participating preference shares Convertible preference shares Non-convertible preference shares Thanks

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