law: Companies Act, 2013 
  Chapter
  
  IV
  Share
  
  Capital and Debentures
  43  . Kinds of share
  
  capital.
  The
  
  share capital of a company limited by shares shall be of two kinds, namely:Ś
  a.      equity share capitalŚ
               
  
   i.        
  
    with
  
  voting rights; or
              
  
   ii.        
  
    with
  
  differential rights as to dividend, voting or otherwise in accordance with such
  
  rules as may be prescribed; and
  b.     preference share
  
  capital:
  Provided
  
  that nothing contained in this Act shall affect the rights of the preference
  
  shareholders who are entitled to participate in the proceeds of winding up
  
  before the commencement of this Act.
  Explanation.Ś For the purposes of
  
  this section,Ś
               
  
   i.        
  
    ææequity
  
  share capitalÆÆ, with reference to any company limited by shares, means all
  
  share capital which is not preference share capital;
              
  
   ii.        
  
    ææpreference
  
  share capitalÆÆ, with reference to any company limited by shares, means that
  
  part of the issued share capital of the company which carries or would carry a
  
  preferential right with respect toŚ
  a.     
  
    payment
  
  of dividend, either as a fixed amount or an amount calculated at a fixed rate,
  
  which may either be free of or subject to income-tax; and
  b.    
  
    repayment,
  
  in the case of a winding up or repayment of capital, of the amount of the share
  
  capital paid-up or deemed to have been paid-up, whether or not, there is a
  
  preferential right to the payment of any fixed premium or premium on any fixed
  
  scale, specified in the memorandum or articles of the company;
             
  
   i.        
  
     
             
  
   ii.        
  
     
             
  
   iii.        
  
    capital
  
  shall be deemed to be preference capital, notwithstanding that it is entitled
  
  to either or both of the following rights, namely:Ś
  a.     
  
    that
  
  in respect of dividends, in addition to the preferential rights to the amounts
  
  specified in sub-clause (a ) of clause (ii ), it has a right to
  
  participate, whether fully or to a limited extent, with capital not entitled to
  
  the preferential right aforesaid;
  b.    
  
    that
  
  in respect of capital, in addition to the preferential right to the repayment,
  
  on a winding up, of the amounts specified in sub-clause (b ) of clause (ii ),
  
  it has a right to participate, whether fully or to a limited extent, with
  
  capital not entitled to that preferential right in any surplus which may remain
  
  after the entire capital has been repaid.