PREFERENCE SHARE CERTIFICATE

[RAJESH]

Dear all,   Is there a prescribed and separate format for Preference Share Certificate, or the one used for Equity Shares can be used for issue of Preference Shares as well.  Pls throw some light on this issue.  Thanks in Advance.     Rgds, N.RAJESH

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[chakri hegde]

Dear Sir,

I think you can use the same format in which Equity Share Certificate is issue. 

Because, as per Companies Issue of share certificate Rules, 1960, there is no seperate format for Equity Share and Preference Share. It says that, the Form of share certificate should be as per these rules.

 

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With Best Wishes
Chakri G Hegde
Nissin Foods India Ltd.
Bangalore

[RAJESH]

Dear Chakri,   Thanks a lot, Rgds, N.RAJESH S.Kedarnath & Associates Malleshwaram Bangalore 080-23560101 --- On Mon, 15/2/10, chakri hegde <chakri...@gmail.com> wrote:

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[CA.R.GANESAN]

Dear Members

 

I need a clarification.

 

The company issued Preference shares for 40 Croroes and the Dividend is at 6% non cumulative

 

the company has profits to pay the dividend But the compnay has not declared the dividend

 

It says that now where in Companies act the law compels tha the Pref dividend to be paid

It is only the discretion of the board of directors

 

The equity dividend is also not paid

 

My query is

 

Is the company right in refusing to pay the dividend in spite of divisible profit for each year

 

It is also to be noted that the Pref Shares are non cumulative . There fore the Pref Sha Holders can not claim arrears also

 

Please give your views on this

 

R.Ganesan FCS

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[chakri hegde]

Dear Sir,

the nature of non-cumulative preference shares are like, if the the dividend has not been paid for any year ( even though the co. is having adequate profit with it), it will get lapsed for that particular year, means it will not get accumalated like cumulative preference shares. 

I think, its a kind of preference share in the nature of equity share. I think, if these kinds of shares are issued by the company, normelly they are having the conversion option at the maturity period. That means, after the expiry of the maturity period, they will be converted into equity shares.

Any contrary views, if any, are invited on this issue...........................