Redemption of preference shares

Accountancy

Sir if we are redeeming preference shares through fresh proceeds . And such fresh issue having equity shares can we Use that security premium. ( Company not covered u/sec 133)

M Naresh

CA Final

★ 3K+

19-Jun-21 15:31

1K+

Answers (2)

No we cannot use the Securities premium earned through the fresh issue of equity share capital to redeem the preference share capital/premium on redemption of preference shares.

Harsha Devathi

CA Final

★ 135

19-Jun-21 16:26

That premium can only be used for providing for premium payable on redemption of preference shares. In no case securities premium can be used for redemotion of pref. shares. (whether company covered under S.133 or not),

Sahibdeep Singh

CA Inter

★ 14K+

19-Jun-21 18:06