# Kinds of Share Capital — Section 43
A company limited by shares has share capital of two broad kinds:
```
Kinds of Share Capital
|
+-------------------+--------------------+
| |
Equity Share Capital Preference Share Capital
|
+----+----+
| |
With With differential rights
voting as to dividend, voting,
rights or otherwise (DVR shares)
```
## (a) Equity Share Capital [Section 43(a) read with Explanation I]
All share capital that is not preference share capital. Further sub-divided into:
1. Equity shares with voting rights — the 'plain vanilla' equity share, carrying equitable (i.e., equal) voting rights proportionate to paid-up capital.
2. Equity shares with differential rights (DVR shares) — issued in accordance with prescribed rules. DVR may relate to dividend, voting, or otherwise.
Equity shares are often called ordinary shares, and sometimes common shares.
## (b) Preference Share Capital [Section 43(b)]
Discussed in detail in the next lesson — characterised by preferential rights as to dividend and repayment of capital on winding up.
## Key Point — Application
- Section 43 applies to companies limited by shares.
- A private company may, however, opt out of Section 43 (and Sections 47, 50(2), 56(4)(d)) by its memorandum or articles — this flexibility is provided to private companies for tailoring class rights.