COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 58 Power to issue redeemable preference shares.

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COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 58

Power to issue redeemable preference shares.

58.(1) Subject to the provisions of this section, a company limited by shares
may, if so authorised by its articles, issue preference shares which are, or
at the option of the company are to be liable, to be redeemed, so, however,
that

(a)no such shares shall be redeemed except out of profits of the company which
would otherwise be available for dividend or out of the proceeds of a fresh
issue of shares made for the purposes of the redemption;

(b)no such shares shall be redeemed unless they are fully paid;

(c)the premium, if any, payable on redemption, must have been provided for out
of the profits of the company or out of the company's share premium account
before the shares are redeemed;

(d)where any such shares are redeemed otherwise than out of the proceeds of a
fresh issue, there shall out of profits which would otherwise have been
available for dividend be transferred to a reserve fund, to be called "the
capital redemption reserve fund", a sum equal to the nominal amount of the
shares redeemed, and the provisions of this Act relating to the reduction of
the share capital of a company shall, except as provided in this section,
apply as if the capital redemption reserve fund were paid-up share capital of
the company.

(2) Subject to the provisions of this section, the redemption of preference
shares thereunder may be effected on such terms and in such manner as may be
provided by the articles of the company.

(3) The redemption of preference shares under this section by a company shall
not be taken as reducing the amount of the company's authorised share capital.

(4) Subject to sub-section (5), where in pursuance of this section a company
has redeemed or is about to redeem any preference shares, it shall have power
to issue shares up to the nominal amount of the shares redeemed or to be
redeemed as if those shares had never been issued, and accordingly [for the
purposes of Article 8 of the Finance (Miscellaneous Provisions) (Northern
Ireland) Order 1973, the issue of shares in pursuance of this sub-section
shall constitute a chargeable transaction if, and only if, the actual value of
the shares so issued exceeds the value of the preference shares at the date of
their redemption, and, where the issue of the shares does constitute a
chargeable transaction for the purposes of that Article, the amount on which
stamp duty on the relevant document relating to that transaction is chargeable
under paragraph (5) of that Article shall be the difference between

(a)the amount on which that duty would be so chargeable if no preference
shares had been or were about to be redeemed; and

(b)the value of the preference shares at the date of their redemption.]

(5) Where new shares are issued before the redemption of the old shares, the
new shares shall not, so far as relates to stamp duty, be deemed to have been
issued in pursuance of sub-section (4) unless the old shares are redeemed
within one month after the issue of the new shares.

(6) The capital redemption reserve fund may, notwithstanding any- thing in
this section, be applied by the company in paying up unissued shares of
the company to be issued to members of the company as fully paid bonus shares.

Power of company to arrange for different amounts being paid on shares.

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Northern Irish Legislation

COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 58