Can some one help me in finding out which section in companies act talks about usage of capital reserve ?
Rishikesh
Menu
Capital Reserve in Companies Act, 1956
Replies (6)
Pl refer to following Sections:
1) Sec.80(5): Capital Redemption Reserve can be used for issue of bonus shares.
2) Sec.80(1): Provisions of reduction of share capital will apply to redemption of preference shares if there is no fresh issue or CRR is not created.
3) Sec.78(2): Use of Securities Premium Account
4) Sec.77A(1)(iii): Use of Securities Premium Account for buy-back of securities.
5) Sec.78(1): Provisions of reduction of share capital will apply to Securities Premium A/c in the given case.
6) Sec.117C: Use of Debenture Redemption Reserve for redemption of debentures only.
7) Para 14.4 of AS-10: Loss on disposal of fixed assets to be charged to Revaluation Reserve Account.
Thanks.
can i have more clarification on capital reserve. can it be treated as free reserve.
Capital reserves are those reserves, which are not created out of operating profit. In other words, these reserves are created out of capital profits. Profit on sale or revaluation on fixedassets is capital profit, which are generally not available fordistribution among the shareholders of the company. The following are some examples of capital profits, which are thesources of creating capital profits which are the sources of creating capital reserves.
- Profit on sale of revaluation of fixed assets.
- Profit on repayment of debentures.
- Profit earned through the issue of shares at premium.
- Profit earned through forfeiture and re-issue of shares.
- Profit on the purchase of running business etc.
Utilization of Capital Reserves:
- To meet future capital losses
- To issue as fully paid bonus shares
- To strengthen the financial position of the business.
can i know the reserves used for the redemption of debentures, preference shares and buyback
capital reserve used to written off the fixed assets as per part c of companies act 2013
capital reserve used to written off the fixed assets as per part c of companies act 2013- where it is written specifically, can you pls help
Recent Threads
- Regarding Annual Return for 23-24
- Property registration without physical PAN card
- Paying Rent in Cash: This Could Trigger an Income
- Market Down, Portfolio Down: Need suggestions for
- How much tax is payable If I withdraw my mutual fu
- GST Penalty Provisions under Section 73 vs Section
- How VFA Academy Helps Traders Build Discipline and
- GSTR-3B Relationship
- Section 194T: TDS on Payments to Partners: Applica
- Tax planning with HUF
Related Threads
CAclubindia
