Redemption of preference capital
This query is : Resolved
Quick Summary
Abinash Panda
(Querist)
23 April 2023
A company's balance sheet
ESC 100 BANK 400
PSC 50
P&L (300)
G/R 50
LOAN 500
Can the company redeem it's preference share by using general reserve and kindly tell me , is it bad for creditor and members.
Kindly explain it . No one gave me
Answer .
ESC 100 BANK 400
PSC 50
P&L (300)
G/R 50
LOAN 500
Can the company redeem it's preference share by using general reserve and kindly tell me , is it bad for creditor and members.
Kindly explain it . No one gave me
Answer .
25 April 2023
GR minus debit balance of P&L = -250. Not sufficient to create CRR.
The company cannot redeem pref. shares out of reserves here. It needs to issue fresh shares.
The company cannot redeem pref. shares out of reserves here. It needs to issue fresh shares.
Jatin Bajaj
(Expert)
02 May 2023
The Company can redeem the prefernce shares by proceeds of fresh issue and out of the profit of the Company
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