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of <h1>Section 55 of Companies Act, 2013: Rules on Issuing Redeemable Preference Shares and Capital Redemption Reserve Account Explained.</h1> Section 55 of the Companies Act, 2013, prohibits companies limited by shares from issuing irredeemable preference shares. Companies can issue redeemable preference shares for up to 20 years if authorized by their articles, with exceptions for infrastructure projects. Redemption must be out of profits available for dividends or proceeds from fresh share issues, and shares must be fully paid before redemption. A Capital Redemption Reserve Account must be created for shares redeemed from profits. If unable to redeem, companies can issue further redeemable shares with shareholder and Tribunal approval. The capital redemption reserve can be used for issuing fully paid bonus shares.
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