Redeemable preference shares: issuance requires articles' authorisation and redemption only from distributable profits or fresh issue proceeds. A company limited by shares may issue redeemable preference shares if authorised by its articles. Redemption is allowed only out of distributable profits or proceeds of a fresh issue, and only where shares are fully paid; any redemption premium must be met from profits or the security premium account. When redemption is not from a fresh issue, an amount equal to the nominal value must be transferred to the capital redemption reserve account, which may be applied to pay up unissued shares as fully paid bonus shares. Redemption does not reduce authorised capital and reissue up to nominal amount is permitted.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Redeemable preference shares: issuance requires articles' authorisation and redemption only from distributable profits or fresh issue proceeds.
A company limited by shares may issue redeemable preference shares if authorised by its articles. Redemption is allowed only out of distributable profits or proceeds of a fresh issue, and only where shares are fully paid; any redemption premium must be met from profits or the security premium account. When redemption is not from a fresh issue, an amount equal to the nominal value must be transferred to the capital redemption reserve account, which may be applied to pay up unissued shares as fully paid bonus shares. Redemption does not reduce authorised capital and reissue up to nominal amount is permitted.
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