CA PALLAVI VOHRA (Learner) (140 Points)
09 November 2009
Is it possible to have a capital structure having equity share capital of Rs. 1 lakh and preference share capital of Rs 30 Cr?
Further is it possible to distribute profits amongst equity & preference shareholders in the above ratio by issuing participating preference shares?
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 09 November 2009
Dear Pallavi, It is very much possible. But in that case you have to maintain your minimum preference authorised capital Rs. 30 crore. As per my understanding participating preference shares means shares the holders of which are entitled to participate in the surplus profit/dividend besides, entitlement to fixed dividend or dividend at fixed rate. So it is also possible to distribute profits amongst equity & preference shareholders in the above ratio by issuing participating preference shares. Revert if there is any doubt. Best Regards
CAclubindia
