Redemption of Preference Shares out of reserves
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 June 2010
can any one provide me with the draft procedure for redemtion of Preference shares out of reserves?????
09 June 2010
REDEMPTION CHECKLIST
Following points may be taken in to consideration for compliance of section 80.
1. For issue of redeemable Preference shares, ensure that-
a) Articles of Association authorise such issue.
b) Terms of issue provide for redemption.
2. Ensure that redemption is done only out of
a) Profits available for distribution.
b) Fresh issue proceeds for this purpose
3. If articles do not provide , Table A would apply
4. Inform Preference shareholders individually as well as through newspaper about proposed redemption;
5. If redemption is through fresh issue shares should be redeemed within one month of the issue, shares should be redeemed within one month of the issue.
6. Ensure that only fully paid up shares are redeemed.
7. Obtain approval of Board of directors.
8. Premium, if any, on redemption should be sourced from out of profits or securities premium account ;
9. In case of listed companies, the intimation of redemption should be sent to stock exchanges;
10. Ensure that a sum equivalent to nominal value of redeemed shares is transferred to capital redemption reserve account. This does not apply where fresh issue is made to finance redemption.
11. Ensure proper disclosures in Balance- Sheet as per schedule VI requirements;
12. Intimate the Registrar under section 95 within one month of redemptions
13. Ensure that section 77A(8) on buy-back of shares is not hit by redemption by conversion of preference shares.
Following points may be taken in to consideration for compliance of section 80.
1. For issue of redeemable Preference shares, ensure that-
a) Articles of Association authorise such issue.
b) Terms of issue provide for redemption.
2. Ensure that redemption is done only out of
a) Profits available for distribution.
b) Fresh issue proceeds for this purpose
3. If articles do not provide , Table A would apply
4. Inform Preference shareholders individually as well as through newspaper about proposed redemption;
5. If redemption is through fresh issue shares should be redeemed within one month of the issue, shares should be redeemed within one month of the issue.
6. Ensure that only fully paid up shares are redeemed.
7. Obtain approval of Board of directors.
8. Premium, if any, on redemption should be sourced from out of profits or securities premium account ;
9. In case of listed companies, the intimation of redemption should be sent to stock exchanges;
10. Ensure that a sum equivalent to nominal value of redeemed shares is transferred to capital redemption reserve account. This does not apply where fresh issue is made to finance redemption.
11. Ensure proper disclosures in Balance- Sheet as per schedule VI requirements;
12. Intimate the Registrar under section 95 within one month of redemptions
13. Ensure that section 77A(8) on buy-back of shares is not hit by redemption by conversion of preference shares.
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 June 2010
thnks dear but i want full procedure in document to be followed as my company is not listed. can u provide me the whole procedure in word file inclusive of notice and other related matters???
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