ISSUE OF PREFERENCE SHARES :

A company limited by shares may, if so authorised by its articles, issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue under section 55 of the Companies Act 2013. No company limited by shares shall, can issue any preference shares which are irredeemable.

A company may issue preference shares for a period exceeding 20 years but not exceeding 30 years for infrastructure projects (Specified in Schedule VI). However, it is subject to redemption of minimum 10% of such preference shares per year from the twenty-first year onwards or earlier, on proportionate basis, at the option of the preference shareholders. Redemption of preference shares

The preference shares can be redeemed only when they are fully paid up-

– out of the 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 such redemption.