Companies Act, 1990
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Power to issue redeemable shares. |
207.—(1) Subject to the provisions of this Part, a company limited by shares or limited by guarantee and having a share capital may, ifso authorised by its articles, issue redeemable shares and redeem them accordingly. | |
(2) The issue and redemption of shares by a company pursuant to subsection (1) shall be subject to the following conditions— | ||
(a) No redeemable shares shall be issued or redeemed at any time when the nominal value of the issued share capital which is not redeemable is less than one tenth of the nominal value of the total issued share capital of the company. | ||
(b) No such shares shall be redeemed unless they are fully paid. | ||
(c) The terms of redemption must provide for payment on redemption. | ||
(d) (i) Subject to subparagraph (ii), no such shares shall be redeemed otherwise than out of profits available for distribution. | ||
(ii) Where the company proposes to cancel shares on redemption pursuant to section 208 , such shares may also be redeemed out of the proceeds of a fresh issue of shares made for the purposes of redemption. | ||
(e) The premium, if any, payable on redemption, must, subject to paragraph (f), have been provided for out of the said profits of the company. | ||
(f) Where the shares were issued at a premium, any premium payable on their redemption (being a redemption to which paragraph (d) (ii) applies) may be paid out of the proceeds of a fresh issue of shares made for the purposes of the redemption, up to an amount equal to— | ||
(i) the aggregate of the premiums received by the company on the issue of the shares redeemed, or | ||
(ii) the current amount of the company's share premium account (including any sum transferred to that account in respect of premiums on the new shares), | ||
whichever is the less, and in any such case the amount of the company's share premium account shall, notwithstanding anything in section 62 (1) of the Principal Act, be reduced by a sum corresponding (or by sums in the aggregate corresponding) to the amount of any payment made by virtue of this paragraph out of the proceeds of the issue of the new shares. | ||
(3) Subject to the provisions of this Part, the redemption of shares may be effected on such terms and in such manner as may be provided by the articles of the company. |