Shares: Meaning and Kinds of Shares | Company Law

Meaning of Shares - 

       According to Section 2(84) of the Companies Act 2013, Share means Share in the share capital of a company and includes stock.
       In the context of company law, expression "Share" means it typical movable property which for all practical purposes can be sold, mortgaged and bequeathed.

Kinds of Shares - 

According to Section 86 of the Companies Act 1956 there are two kinds of shares which are as follows -

1) Equity shares or ordinary shares and

2) Preference shares

1) Equity shares or ordinary shares and - 

     The "equity shares" are also known as Ordinary Shares.  according to Section 85(2) of the Companies Act 1956 (Corresponding Section 83 of the Companies Act 2013) the term "equity share capital" means, with reference to any such company, all share capital which is not preference share capital.

2) Preference Shares -

According to Section 85(1) of the Companies Act 1956 (corresponding section 43 of the Companies Act 2013) the term "Preference shares" means with reference to any company limited by share, a fixed rate of dividend or premium is payable over the equity shareholders or ordinary shareholders as specified in the memorandum of association or articles of association. (See...Distinction / Difference between Memorandum of Association and Articles of Associations )

Relevant Case Law -

     Viswanathan Vs East India Distillers (AIR 1957 Mad.HC.341) 

       In this case, the court said, A share is undoubtedly a movable property but it is not movable property in the same way in which a bale of cloth or a bag of wheat is movable property. such commodities are not brought into existence by legislation but a share in a company belongs to a totally different category of property.  It is incorporated in nature, and it consists merely a bundle of rights and obligations.

See also...

1. Power and Functions of SEBI (The Securities and Exchange Board of India)

2. Establishment of the Securities and Exchange Board of India (SEBI)

3. Distinction / Difference between a Public Company and a Private Company

4. When a Private Company becomes a Public Company

5. Characteristics of a Company