Companies Act 2016 · Updated to 31 Jan 2025 · Part III · Management of Company
72. Preference shares
Feedback & supportSubject to its constitution, a company having a share capital may issue preference shares.
Subject to this section and if authorized by its constitution, a company may issue preference shares which are liable, or at the option of the company are to be liable, to be redeemed in accordance with the constitution.
The redemption of the preference shares shall not be taken as reducing the amount of share capital of the company.
Subject to subsections (5) and (6), the shares shall be redeemable only if the shares are fully paid up and the redemption shall be out of—
profits;
a fresh issue of shares; or
112
capital of the company.
Where any such shares are redeemed out of profits pursuant to paragraph (4)(a) which would otherwise have been available for dividend, there shall be transferred into the share capital accounts of the company, a sum equal to the amount of the shares redeemed.
The redemption of shares out of the capital referred to in paragraph (4)(c) shall only be redeemed subject to the following:
all the directors have made a solvency statement under section 113 in relation to such redemption; and
the company has lodged a copy of the solvency statement with the Registrar.
The company shall give notice to the Registrar specifying the shares redeemed within fourteen days from the redemption.