Question

According to Section 80 of the Companies Act, 1956, a company cannot redeem its preference shares out of ___________________.

• A. Revenue profits
• B. Net proceeds of fresh issue of shares
• C. Partly out of revenue profit and partly out of net proceeds of fresh issue of shares
• D. Out of sale proceeds of fixed assets

Answer 1

The correct option is D Out of sale proceeds of fixed assets

According to Section 80 of The Companies Act, 1956 the redemption of preference shares are subject to the following conditions :-

It means, partly paid up preference shares cannot be redeemed.