Daniella is convinced that it is high time she left employment to start up her own company. She wants to register the company and perhaps raise capital through issuance of shares. She has heard people mention several terms she has no clue about. She needs you to make her understand how to raise capital through issuance of shares and to explain the following terms.

a. Equity shares

b. Preference shares

c. Deferred shares

Required:

Explain to Daniella what a share is and how it is used to raise capital and further make her understand the terms highlighted above (a-c).(20 marks)

Page 5 of 5