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of <h1>Companies Act Sec 80: Rules for Issuing and Redeeming Preference Shares, Including Restrictions and Compliance Penalties.</h1> Section 80 of the Companies Act, 1956, allows a company limited by shares to issue redeemable preference shares if authorized by its articles. These shares can only be redeemed from profits available for dividends or from the proceeds of a new share issue, and must be fully paid. Any premium on redemption must be covered by profits or the security premium account. If shares are redeemed from profits, an equivalent amount must be transferred to a capital redemption reserve account. Redemption does not reduce authorized share capital, and companies can issue new shares equivalent to the redeemed shares. Irredeemable preference shares or those redeemable after 20 years are prohibited. Non-compliance results in fines.
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