Provision
Sourav 049Beginner
Please explain the meaning of this provision relating to capital deemed to be pref capital
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Firstly as we know preference share holders have preferential right over equity shareholders in respect to receipt of dividend and payment of paid up capital while winding up or repayment of capital.
The provision you have mentioned means that preference shareholders MAY (not mandatory) also be given right to receive share in surplus profits of company after payment of dividend to preference shareholders as well as equity shareholders and also be given right to receive extra payment on winding up apart from their own paid up capital after payment to them and equity shareholders