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Question
Justify the following statement.
Equity shareholder enjoys certain rights.
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Solution
Equity Shareholders enjoy certain rights as given below:
- Right to vote: It is the basic right of equity shareholders through which they elect directors, alter Memorandum and Articles of Association, etc.
- Right to share in profit: It is an important right of equity shareholders. They have the right to share in profit when distributed as dividends. If the company is successful and makes a handsome profit, they have the advantage of getting a large dividend.
- Right to inspect books: Equity shareholders have the right to inspect the statutory books of their company.
- Right to transfer shares: The equity shareholders enjoy the right to transfer shares as per the procedure laid down in the Articles of Association.
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