Deferred Shares

In India deferred shares were issued prior to 1956. The Companies Act, 1956 prohibited public limited companies to have these shares. Deferred shares are those shares in which the right to share in the profits of the company is deferred, i.e. postponed till all other shareholders receive their normal dividends.
The companies Act, 1956 now permits only tow kings of shares to be issued, namely equity share capital or ordinary shares and preference shares.