Question

State any one type of shares.

Hint:

Equity shareholders are considered the true owners of the company as they bear the ultimate risk and hold voting power.

Answer 1

Step 1: Understanding the Concept:
A company's capital is divided into small, equal units known as shares. Companies generally issue specific types of shares to raise capital from the public.

Step 2: Detailed Explanation:
According to the Companies Act, a company limited by shares can issue two main types of shares:
1. Equity Shares: These are ordinary shares that carry voting rights and a fluctuating rate of dividend based on profits. They bear the maximum risk.
2. Preference Shares: These shares carry preferential rights regarding the payment of dividend (at a fixed rate) and repayment of capital in the event of winding up.
Stating either "Equity Shares" or "Preference Shares" is a correct answer. The handwritten note in the source image correctly identifies "Equity shares".

Step 3: Final Answer:
Equity Shares (or Preference Shares).