Redemption of shares, Business Law and Ethics

Redemption of Shares:

Section 60 (1) empowers a company limited by shares to issue preference shares that are, or may be at the option of the company are to be liable, to be redeemed, if the articles authorise such an issue. It however, provides that -

a)      no such shares shall be redeemed except out of the profits of the company which would otherwise be available for dividend and, or just out of the proceeds of a fresh issue of shares made for the purposes of the redemption;

b)      however no such shares shall be redeemed unless they are fully paid;

c)      the premium, if any, payable on redemption must have been provided for out of the profits of the company or out of the company's share premium account before the shares are redeemed;

d)      where any such shares are redeemed otherwise than out of the proceeds of a fresh issue so therefore shall out of profits that would otherwise have been available for dividend be trasferred to a reserved fund, to be called the capital redemption reserve fund, hence a sum equal to the nominal amount of the shares redeemed. The provisions of the Act relating to the reduction of the share capital of a company shall apply to the reserve fund as if it were paid-up share capital of the company, but subsection 5 provides that the capital redemption reserve fund may be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares. These provisions are intended to prevent a company's authorised capital from being reduced by any redemption of the redeemable preference shares of the company.

Posted Date: 1/12/2013 4:31:26 AM | Location : United States







Related Discussions:- Redemption of shares, Assignment Help, Ask Question on Redemption of shares, Get Answer, Expert's Help, Redemption of shares Discussions

Write discussion on Redemption of shares
Your posts are moderated
Related Questions
International law relating to air and outer space International law relating to air and outer space is an extensive and important area. It regulates at global level and its si

QUESTION 1 (a) Under which circumstances can banking information on customers be disclosed and at the same time not breaching the confidentiality clause of the Banking Act (

Presumptions: Therefore in their attempt to construe statutes that courts of law are guided through the subsequent assumptions or presumptions.; (a)   That the statute was

Question: (a) Describe the kind of organisation that you would be willing to work for as a Professional. (b) As a practicing Professional, what body of knowledge, skills

State Article 30 of international law Article 30 further states that his or her private residence and papers, correspondence and property are all inviolable.

Partnership Property Partnership property comprises all property originally brought in the partnership as well like acquired for the purposes of such the firm's businesses. Th

Question 1: " One of those general precepts of our law of contract is that covenants legally entered into cannot be revoked except by the mutual consent of the parties theret

1 With reference to the material discussed in class n in the reading over the last few weeks, I would like you to continue a fours on the ethical things that we can all do in our e

What are the functions and powers of the United Nations General Assembly? The functions and powers of the United Nations General Assembly are as illustrated here: • To see a

1. How do mandatory terms limit freedom of contract? 2. How do contract interpretation issues arise? 3. What is the difference between subjective and objective intent?   4