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Scribd Upload 4 Nature and Classes of Shares
Scribd Upload 4 Nature and Classes of Shares
The amount of authorised capital, together with the number of shares in which it is split is
mentioned in the Memorandum of Association but the divisions of shares in which the
enterprise’s capital is to be split along with their specific obligations and rights, are
recommended by the Articles of Association of the company. As per The Companies Act, an
enterprise can issue 2 types of shares:
Preference shares
Equity shares (also called ordinary shares)
1
Features of Equity Shares :
Equity share capital remains with the company. It is given back only when the enterprise is
closed
Equity shareholders possess voting rights and select the management of the enterprise
The above mentioned is the concept that is explained in detail about Nature and Classes of
Shares.