Preference share redemption rules restrict irredeemable issues and set conditions for redemption and reserve use. Companies are prohibited from issuing irredeemable preference shares. Redeemable preference shares may be issued if authorised by articles and subject to prescribed conditions; redemption must be from distributable profits or fresh share issue proceeds and only when fully paid. Where redeemed from profits, an amount equal to the nominal value must be transferred to the Capital Redemption Reserve Account treated as paid-up capital. Premium on redemption is to be met from profits or securities premium account as prescribed. If a company cannot redeem or pay dividends, with requisite holder consent and Tribunal approval it may issue further redeemable preference shares equal to amounts due, with non-consenting holders to be redeemed forthwith.
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.
Preference share redemption rules restrict irredeemable issues and set conditions for redemption and reserve use.
Companies are prohibited from issuing irredeemable preference shares. Redeemable preference shares may be issued if authorised by articles and subject to prescribed conditions; redemption must be from distributable profits or fresh share issue proceeds and only when fully paid. Where redeemed from profits, an amount equal to the nominal value must be transferred to the Capital Redemption Reserve Account treated as paid-up capital. Premium on redemption is to be met from profits or securities premium account as prescribed. If a company cannot redeem or pay dividends, with requisite holder consent and Tribunal approval it may issue further redeemable preference shares equal to amounts due, with non-consenting holders to be redeemed forthwith.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
TaxTMI 
