Accountancy Part AAccounting for Shares

Which section of the Company's Act defines/describes Equity and Prefe…

Which section of the Company's Act defines/describes Equity and Preference Shares?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Section 43

NCERT (2026-27 edition):
Equity Shares – “According to Section 43 of The Companies Act, 2013, an equity share is a share which is not a preference share. In other words, shares which do not enjoy any preferential right in the payment of dividend or repayment of capital, are termed as equity/ordinary shares.”