Can a co. b incorporated only with Preference capital

[Asuch]

This is the question asked with 1 of my frens in an interview:

 

Can a co. b incorporated only with Preference capital?

 

Expecting your earnest response.

 

Keep communicating...

--
Vj
Trezrrr every pulsss
http://yehseeyes.blogspot.com/

[Kasturi Sastry]

Dear Vj,

 

 

I feel there is no bar under Company Law to incorporate a company only with Preference Capital.

 

Even under section 3 of the Companies Act whcih defines Public and Private Companies, it is mentioned that a public company and a private company must have minimum paid up capital of not less than five lakhs and one lakh rupees respectively and does not specify that it should be only equity capital.

 

Hence, a company can be incorporated only with preference capital.

 

Regards,
 

Kasturi S

 

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