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meenu (company secretary)     16 September 2009

Preference shareholders Right

What is the course of action if teh Share pruchase agreement does not contain any rights related to pref. shareholders and nor the articles of the co.

 

meenu



Learning

 1 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     16 September 2009

Preference shares section 85 explains fully about it. Preference shareholders have a precedence over the ordinary shareholders, but next to debenture holders for the payment of dividends and return on capital if the issuing company goes under liquidation. Preference shareholders are entitled toa fixed rate of dividend, but participating preference shareholders also are entitled to a share in the residual profits. These shareholders carry limited voting rights and may be redeemable or therwise.


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