State and briefly discuss the conditions which must be fulfilled before a company can either issue or redeem shares which are stated to be...

      

State and briefly discuss the conditions which must be fulfilled before a company can
either issue or redeem shares which are stated to be redeemable.

  

Answers


Martin
A company may issue redeemable preference shares pursuant to the following conditions:
- The issue must be authorized by the articles.
- The company?s capital must be dividend into different classes of shares.
- The issue must be disclosed in the company?s prospectus or statement in lieu.
- The registrar must be notified of the issue.

A company may redeem any redeemable preference shares pursuant to the following conditions:
- The redemption must be authorized by the articles.
- The shares must be fully paid.
-The share must be redeemed profit or proceeds of a special issue for that purpose.
- Any premium payable must be provided out of the profit of the company or the share premium account. - If the shares are redeemed otherwise than out of the proceeds of a special issue, the capital redemption reserve fund must be created.
- The registrar must be notified of the redemption within 30 days thereof.
marto answered the question on February 6, 2019 at 06:34


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