Redemption of preference shares

Sir , I have listened the Class Redemption of preference shares But I am Not sure Regarding Why sometimes we are dividing Fresh proceeds with issue price. How can we divide the issue price to redeem the preference shares including premium . As it is contravention to sec 55. Sir , I also watched the video in youtube but I didn't understand the logic behind it. Sir could you please do a video on this specific point. that clears the Doubt of whole chapter

M.V. Naresh

M.V. Naresh

CA Inter


03-Nov-20 11:37


Answers (1)

The video on youtube is specific to this doubt. There are two ways to determine number of shares to be issued. First case - when we have sufficient bank balance. In this face value is relevant. Second case - when we do not have suffcient bank balance. In this case we need to check both face value and face value + premium. The transfer to CRR will be based on face value. It is not a contravention to S.55

Suraj Lakhotia

Suraj Lakhotia


04-Nov-20 07:33