Redemption of preference shares

Dear Friends,

X is Company having 12% 8500000 Preference shares of rs 10 Each issued in the month of Feb 2014, wants to Redeme its Preference shares out of money to be received from its debtors or amount to be borrow from Bank can it do so??

As per provisions of Section 55 of Companies Act, 2013 Company cannot redeme its preference shares except

out of profits or fresh issue of Shares..

Please give you suggestions ASAP.

Replies (1)

Capital Redemption Reserve created for the specific purpose can be used to redeem them.

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