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use of Capital Redemption Reserve

Others 21604 views 6 replies

Hi Dear all,

Please tell me what is the use of the Capital Redemption Reserve cretaed after redemption of Reddemable Preference shares ?

Where I can use the Amount so set aside ?

Thanks And Regards,

 

 

Replies (6)
Originally posted by :Gargi
" for bonus issue "

 

As per Sec.80(5) of the Companies act.

"the capital redemption reserve may be applied by the company in paying up unissued shares of hte company to be issued to the members of hte company as fully paid bonus shares."

 only for bonus issue of share..... nothing else.

Originally posted by :Gargi
" Hi Dear all,
Please tell me what is the use of the Capital Redemption Reserve cretaed after redemption of Reddemable Preference shares ?
Where I can use the Amount so set aside ?
Thanks And Regards,
 
 
"

Originally posted by :Gargi
" Hi Dear all,
Please tell me what is the use of the Capital Redemption Reserve cretaed after redemption of Reddemable Preference shares ?
Where I can use the Amount so set aside ?
Thanks And Regards,
 
 
"


 

Thanks for reply all of you but one of the book which I usually refer states that it can also be utilised for redemption of preference share capltal in that case ,does that means at the time of next redemption Ineed not require to create another CRR or if Iutilising it on one hand and creating another CRR for next issue what is the use of the  provision, what should be the entry in this regard. 

This fund can be utilized only for issuing fully paid bonus shares. No dividend can be distributed out of this fund.


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