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A company has not paid dividend on its preference shares for two consecutive years. At the next general meeting, preference shareholders:
AHave no voting rights
BAcquire voting rights only on resolutions affecting preference shares
CAcquire the right to vote on all resolutions
DAre entitled to liquidation
Answer & Solution
Correct answer: C. Acquire the right to vote on all resolutions
1. Section 47(2) gives preference shareholders the right to vote on every resolution if dividend is in arrears for two years or more.
2. Until then, they vote only on matters directly affecting them.
3. Hence (B).
_Source: ICAI BoS CA Inter Paper 2 — Share Capital and Debentures_