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Redeemption of preference shares
Company ABC PVT. LTD. has authorized capital as per MOA 2,25,000 shares includes 2,23,000 equity shares & 2,000 preference shares .
Now company want to redeem its 2,000 preference shares by issuing 2,000 equity shares
Does it mean company exceeding its authorized capital.
Replies (4)
I dont think it can be redeemed by way of issuing equity shares .
Yes, you should increase authorised share capital suitably before redemption of preference shares.
Thanks for Guidence
If the preference shares have been issued.
The shares may be redeemed and thereafter the unissued portion of the preference shares in the Authorised share capital may be cancelled and Further Equity shares may be increased accordingly.
If the preference shares have not been issued.
The unissued portion of the preference shares in the Authorised share capital may be cancelled and Further Equity shares may be increased accordingly.
Regards:
CS Ankur Srivastava
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