redeemable shares


redeemable shares
Shares (either ordinary shares or preference shares) in a company that the issuing company has the right to redeem, under terms specified on issue. Redemption may be funded from distributable profits or from a fresh issue of shares. If the shares were issued at a premium and are to be redeemed at a premium and subject to a maximum amount, the premium may be funded from the share premium account. If redemption reduces the total capital of the company, i.e. no fresh issue is made or the proceeds of the fresh issue do not fully replace the nominal value of the shares redeemed, a capital redemption reserve will need to be credited, to ensure that the creditors' buffer is maintained.

Accounting dictionary. 2014.

Look at other dictionaries:

  • redeemable shares — Under Chapter VII of Part V of the Companies Act 1985, a company can redeem shares which are issued as redeemable shares by repaying the nominal value to the shareholder, whereupon the shares are cancelled. Redemption must normally be from… …   Law dictionary

  • redeemable shares — Shares (either ordinary shares or preference shares) that the issuing company has the right to redeem, under terms specified on issue. Redemption may be funded from distributable profits or from a fresh issue of shares …   Big dictionary of business and management

  • Redeemable — Eligible for redemption under the terms of the indenture. The New York Times Financial Glossary * * * redeem re‧deem [rɪˈdiːm] verb [transitive] FINANCE 1. to pay off a loan or debt: • He intends to redeem the …   Financial and business terms

  • redeemable — Eligible for redemption under the terms of an indenture. Bloomberg Financial Dictionary * * * redeem re‧deem [rɪˈdiːm] verb [transitive] FINANCE 1. to pay off a loan or debt: • He intends to redeem the …   Financial and business terms

  • redeemable preference shares — The issuing company reserves the right to redeem these preference shares. The shares may, or may not, have a specific redemption date. London Stock Exchange Glossary …   Financial and business terms

  • repurchase of shares — Under Chapter VII of Part V of the Companies Act 1985, a company can repurchase its own shares whether or not they are redeemable. The procedure requires shareholder approval and the appropriate power in the Articles of Association. The price… …   Law dictionary

  • redemption of shares — Under Chapter VII of Part V of the Companies Act 1985, a company can redeem shares which are issued as redeemable shares by repaying the nominal value to the shareholder, whereupon the shares are cancelled. Redemption must normally be from… …   Law dictionary

  • own shares purchase — The purchase or redemption of its own shares by a company; this is permitted subject to certain conditions. For example, in the UK redeemable shares may only be redeemed if they are fully paid. If the redemption or purchase of a company s own… …   Accounting dictionary

  • own shares purchase — The purchase or redemption of its own shares by a company; this is permitted subject to certain legal restrictions. For example, in the UK redeemable shares may only be redeemed if they are fully paid. If the redemption or purchase of a company s …   Big dictionary of business and management

  • preference shares — Shares in a company which usually receive a fixed dividend each year and which, if redeemed, are redeemed at par value. Although the dividend ( dividends) is fixed, it is not guaranteed. However, if the company fails to pay ( passes ) the… …   Financial and business terms