Variation of Shareholders’ rights :

Where the share capital of a company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of not less than three- fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class if provided in the memorandum or articles of the company, or if such variation is not prohibited by the terms of issue of the shares of that class.

Accounting Entries

1.	For changing rate of dividend of preference shares   (Old) % Cum preference share capital A/c                              Dr.   To (New) % Cum preference share capital A/c   (Being rate of dividend on preference shares changed)
2	For converting cumulative preference shares into non cumulative preference shares without changing the amount of share   Cum preference share capital A/c Dr.   To Non Cum preference share capital A/c   (Being cumulative preference converted into shares into non cumulative preference shares)