Preference shares do not carry normal voting rights.

Answer: The statement is true.

Preference shares carry two preferential rights: (1) the right to receive dividend at a fixed rate before any dividend is paid to equity shareholders, and (2) the right to repayment of capital before equity shareholders when the company is wound up. In return for these safe, fixed benefits, preference shareholders bear less risk and are not treated as the real owners of the company.

Under Section 47 of the Companies Act, 2013, preference shareholders can vote only on resolutions which directly affect their rights (for example, variation of their rights, winding up, or reduction or repayment of preference capital). They do not vote on normal matters such as appointment of directors or approval of accounts.

However, if dividend on preference shares has remained unpaid for two years or more, they get the right to vote on all resolutions at every general meeting.

Thus, since their return and capital are protected and they do not bear the business risk like equity shareholders, preference shares do not carry normal voting rights.