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# Equity and Debt Market (SYP.M.S) ## Introduction to Financial Markets ### With Voting Rights: * **Section 87 of the Act states:** * Every member of a company holding any equity share can place a resolution before a company with voting rights on a paid-up equity capital. * This resoluti...

# Equity and Debt Market (SYP.M.S) ## Introduction to Financial Markets ### With Voting Rights: * **Section 87 of the Act states:** * Every member of a company holding any equity share can place a resolution before a company with voting rights on a paid-up equity capital. * This resolution is placed before the company and decides the voting rights on a paid-up equity capital. ### With Differential Rights * **As per Companies Amendment Act, 2000:** companies can issue equity shares with differential rights which are in accordance with the Companies Act. * **The Central Government relating to issue of shares states that a company limited by shares can be issued with differential rights with the following conditions:** * Such shares can be issued only if the company shall be issuing equity shares in their financial years prior to the issuance of such shares. * The company should have debentures on the books of the company. * The company has not made any default in payment of interest and principal on debentures for at least the three preceding financial years. * The company has not committed any breach of any covenant/ undertaking of the company. * The company has not been involved in any litigation, arbitration, or proceedings by any shareholder or lender against it. * The company has not made any default in payment of dues to statutory bodies and statutory authorities in the past three years. ## Capitaline, Company Annual Report ### Tax Advantages: * **There is no tax on dividend received in the hands of shareholders. The tax is already deducted in the dividend distribution tax by the company itself and the money in the hands of shareholders are tax free.** * **There is no long term capital gain tax on equity shares.** * **If I buy one share for 100 today and sell the same share after one year, then 10 as long term capital gain is not applicable.** * **However, if I sell that share after 6 months for 110, I have to pay short term capital gain tax on 10.** ## Types of Equity Shares * **As per Section 86 Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000, the equity share capital of a company comprises two types:** * With Voting Rights * With Differential Rights