CORPORATIONS ACT 2001 - SECT 254K Other requirements about redemption

CORPORATIONS ACT 2001 - SECT 254K

    A company may only redeem redeemable preference shares:

  (a)   if the shares are fully paid - up; and

  (b)   out of profits or the proceeds of a new issue of shares made for the purpose of the redemption.

Note 1:   For a director's duty to prevent insolvent trading on redeeming redeemable preference shares, see section   588G.

Note 2:   For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection   254L(3). Section   79 defines involved .