The share capital of a company limited by shares shall be of two kinds, namely:—

1. equity share capital—
   1. with voting rights; or
   2. with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed; and
2. preference share capital:

   Provided that nothing contained in this section shall affect the rights of the preference shareholders who are entitled to participate in the proceeds of winding up before the rights of equity shareholders are satisfied.

Explanation.—For the purposes of this section,—

1. "preference share capital", with reference to any company limited by shares, means that part of the share capital of the company which fulfils both the following requirements, namely:—
   1. that it carries a preferential right with respect to payment of dividend at a fixed rate or a rate calculated at a fixed rate; and
   2. that it also carries, on a winding up, a preferential right to be repaid the amount of capital paid-up or deemed to have been paid-up;
2. "equity share capital", with reference to any company limited by shares, means all share capital which is not preference share capital.