Capital redemption reserve requirement on share buybacks mandates transfer and restricts use to issuing fully paid bonus shares. Where a company purchases its own shares out of free reserves or the securities premium account, a sum equal to the nominal value of the shares purchased must be transferred to the capital redemption reserve account and disclosed in the balance sheet; that reserve may be applied to pay up unissued shares to be issued to members as fully paid bonus shares.
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.
Capital redemption reserve requirement on share buybacks mandates transfer and restricts use to issuing fully paid bonus shares.
Where a company purchases its own shares out of free reserves or the securities premium account, a sum equal to the nominal value of the shares purchased must be transferred to the capital redemption reserve account and disclosed in the balance sheet; that reserve may be applied to pay up unissued shares to be issued to members as fully paid bonus shares.
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