A company may issue redeemable preference shares pursuant to the following conditions:
The issue must be authorized the articles.
The company‟s capital must be dividend into different classes of shares.
The issue must be disclosed in the company‟s prospectus or statement in lieu.
The registrar must be notified of the issue.
A company may redeem any redeemable preference shares pursuant to the following conditions:
The redemption must be authorized the articles.
The shares must be fully paid.
The share must be redeemed profit or proceeds of a special issue for that purpose.
Any premium payable must be provided out of the profit of the company or the share premium account.
If the shares are redeemed otherwise than out of the proceeds of a special issue, the capital redemption reserve fund must be created.
The registrar must be notified of the redemption within 30 days thereof.