[amp_mcq option1=”Shares held by promoters” option2=”Promoter’s holding pledged with lenders” option3=”Shares not issued by the company” option4=”Preference shares” correct=”option2″]
The correct answer is B. Promoter’s holding pledged with lenders.
Encumbered shares are shares that have been pledged as collateral for a loan. This means that the lender has a claim on the shares if the borrower defaults on the loan. Promoters are the individuals or entities that own a controlling stake in a company. They are often the founders of the company and are typically its largest shareholders. When promoters pledge their shares, they are essentially putting their ownership of the company up as collateral for a loan. This can be a risky move, as it could result in them losing control of the company if they are unable to repay the loan.
Option A is incorrect because shares held by promoters are not necessarily encumbered. Only shares that have been pledged as collateral for a loan are considered to be encumbered.
Option C is incorrect because shares not issued by the company cannot be pledged as collateral. In order to be pledged, shares must first be issued by the company.
Option D is incorrect because preference shares are a type of equity share. Equity shares are not typically pledged as collateral, as they do not have a fixed maturity date.