Section 87 of the Companies Act

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Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2010 In section 87 of the Companies Act its mentioned that in case of cumulative preference shares if preference dividend unpaid for last 2 yrs then such preference shareholders get a voting rights in the company as like equity holders i want to know if the company is in loss so they cant able to pay preference dividend then also this section applies that they are getting voting rights in the company

Ankur Garg

Ankur Garg (Expert)
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10 June 2010 Hi,

Section 87(2)(b) is silent about the nature or reason of default. So in your case also preference shareholders would be entitled to voting rights.

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