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Debenture Redemption Reserve

The balance o...

Question

The balance of Capital Redemption Reserve Account is available for ___________.

A

redemption of redeemable preference shares

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B

redemption of redeemable debentures

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C

re-organisation of share capital

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D

issue of bonus shares

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Solution

The correct option is D issue of bonus shares
Section 63 of the companies Act, 2013 deals with the issue of bonus shares. According to Sub-section (1) of this section, a company may issue fully paid-up bonus shares to its members, in any manner whatsoever, out of -
1. its free reserves;
2. the securities premium account; or
3. the capital redemption reserve account.

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