https://www.taxtmi.com/caselaws?id=99188 Preference share capital under section 85 of the Companies Act requires a preferential right to a fixed dividend or fixed rate, together with a preferential right on winding-up or repayment of capital. The Bihar State Financial Corporation shares did not satisfy that test because all shareholders stood in the same class, the dividend was only a guaranteed minimum within a fluctuating range, and there was no preferential right as to capital. The legal character of the shares depended on the rights created by the instrument and governing law, not on the fact that the minimum rate had in practice been paid. The shares were therefore not preference shares, and no further rebate on the dividend was available. en-us Thu, 18 Jul 1974 00:00:00 +0530 Wed, 25 Jan 2012 15:05:26 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=99188 Preference share capital under section 85 of the Companies Act requires a preferential right to a fixed dividend or fixed rate, together with a preferential right on winding-up or repayment of capital. The Bihar State Financial Corporation shares did not satisfy that test because all shareholders stood in the same class, the dividend was only a guaranteed minimum within a fluctuating range, and there was no preferential right as to capital. The legal character of the shares depended on the rights created by the instrument and governing law, not on the fact that the minimum rate had in practice been paid. The shares were therefore not preference shares, and no further rebate on the dividend was available. Case-Laws Companies Law Thu, 18 Jul 1974 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=99188