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Buy back of shares CRR

What is the use of creating CRR For debenture holders,creditors etc......


Ramesh garu

Ramesh garu

CA Inter

9K+

09-Apr-20 11:05

64

Answers (5)

CRR is created to safeguard the interest of stakeholders


M Narendra

M Narendra

CA Inter

4K+

09-Apr-20 11:46

Yes dividend payment to equity or pref. Shareholders will decrease but how it will be useful to others as creditors,deb. Holders


Thread Starter

Ramesh garu

Ramesh garu

CA Inter

9K+

09-Apr-20 12:48

Thread Starter

Ramesh garu

Yes dividend payment to equity or pref. Shareholders will decrease but how it will be useful to others as creditors,deb. Holders

Yes availability of profit for distributing dividend will decrease by creating CRR And how CRR safeguard the interest of debt holder ? See The only use of CRR is issuing bonus share As per Companies Act, 2013 And if bonus shares will be issued then equity will be increased and if equity will be increased then debt equity ratio will be decrease And if debt equity ratio wil decree debt holders will be more assure that they are protected by equity holders Because in case of loss, equity capital will be vanished .


Chandan Subudhi

Chandan Subudhi

CA Inter

12K+

09-Apr-20 17:47

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Thread Starter

Ramesh garu

Ramesh garu

CA Inter

9K+

10-Apr-20 07:18

Thread Starter

Ramesh garu

Yes dividend payment to equity or pref. Shareholders will decrease but how it will be useful to others as creditors,deb. Holders

Also, company cannot pay the amount of CRR as dividend. So this amount will be retained in the company and creditors would be more comfortable.


Suraj Lakhotia

Suraj Lakhotia

Admin

10-Apr-20 12:32

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