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According to Section 2(84) of the Companies Act 2013, 'share' means a share in the share capital of a company and includes stocks.

The capital of a company is divided into small equal units of a finite number. Each unit is referred to as a share. A share is a percentage of ownership in a company or a financial asset. Shareholders are investors who own stock in a company. They are the company's true owners and policymakers. They do not, however, have access to the company's day-to-day operations. To oversee the company's operations, they appoint representatives known as the Board of Directors.

Nature of a Share

(a) A share is a right to a specified amount of share capital of a company, which carries certain rights and liabilities.

(b) A share is a right to participate in the profits made by a company.

(c) Section 44 of the Companies Act, 2013 states "the shares or debentures or other interest of any member in a company shall be movable property transferable in the manner provided by the articles of the company." 

(d) In India, a share is regarded as goods. According to the Sale of Goods Act, 1930, "Goods" means any kind of movable property other than actionable claim and money, and includes stock and shares. 

(e) According to Section 45 of the Companies Act, 2013, every share in a company having a share capital shall be distinguished by its distinctive number but this provision shall not apply to a share held by a person whose name is entered as holder of beneficial interest in such share in the records of a depository.

Types of Share Capital

Section 43 of the Act provides that Share Capital is of two kinds- Equity Share Capital and Preference Share Capital.

Preference Share Capital

According to Explanation to Section 43, Preference share capital means a part of share capital which carries or would carry a preferential right with respect to:

Payment of dividends, it must carry a preferential right to a fixed amount or amount calculated at a fixed rate,

As regards the capital, in the event of a winding up or other arrangement to repayment of capital, there must be a preferential right to be repaid the amount of the capital paid up on such share.

Section 47(2) states that every member of a company limited by shares and holding any preference share capital therein shall, in respect of such capital, have a right to vote only on resolutions placed before the company which directly affect the rights attached to his preference shares and, any resolution for the winding up of the company or for the repayment or reduction of its equity or preference share capital and his voting right on a poll shall be in proportion to his share in the paid-up preference share capital of the company:

Provided that the proportion of the voting rights of equity shareholders to the voting rights of the preference shareholders shall be in the same proportion as the paid-up capital in respect of the equity shares bears to the paid-up capital in respect of the preference shares.

Provided further that where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.

Preference shares can be of the following types:

Cumulative and Non-Cumulative Preference Shares: Cumulative preference shares allow for the carry-forward of undeclared annual dividends to the next financial year. Non-cumulative preference shares do not provide for such benefits.

Participating and Non-Participating Preference Shares: Participating preference shares entitle shareholders to receive surplus profits in addition to dividends, while non-participating preference shares only provide for regular dividends.

Convertible and Non-Convertible Preference Shares: Convertible preference shares can be converted into equity shares, subject to the company's Article of Association stipulations, while non-convertible preference shares cannot be converted.

Redeemable and irredeemable Preference Shares: Redeemable preference shares can be repurchased by the company at a fixed price and time. Irredeemable preference shares have no such provisions.

Equity Share Capital

All share capital, not falling within the above description of preference capital, is equity share capital, which has no guaranteed amount of dividend but carries voting rights.

According to explanation(i) to Section 43 of the Companies Act, 2013 "equity share capital", with reference to any company limited by shares, means all share capital which is not preference share capital.

According to section 47 of the Act, subject to the provisions of section 43, sub-section (2) of section 50 and sub-section (1) of section 188-

(a) every member of a company limited by shares and holding equity share capital therein, shall have a right to vote on every resolution placed before the company; and

(b) his voting right on a poll shall be in proportion to his share in the paid-up equity share capital of the company. 

Section 43 of the Companies Act, 2013 further provides equity share capital can be:

(i) with voting rights, or

(ii) with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed.

Example:

Tata Motors introduced equity shares with differential voting rights in 2008. People who own Tata Motor DVR have one vote for every ten shares they own however they receive a 5% higher dividend than ordinary equity holders. DVR equity shares are trading at a discount to ordinary shares with full voting rights due to the difference in voting rights.

References:

https://blog.ipleaders.in/what-is-share/

https://www.icsi.edu/portals/0/SHARE%2520CAPITAL%2520AND%2520DEBENTURES.pdf

https://www.indiainfoline.com/knowledge-center/share-market/what-are-shares-and-types-of-shares