Company matters Preference and redeemable shares
| Preference and redeemable shares |
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An offshore company is not allowed to issue preference shares or convert ordinary shares to preference shares, unless its articles set out the rights of the holders. Such rights should cover right to repayment of capital, right to participation in surplus assets and profits, right to receive dividends, right to vote and others.[1]
An offshore company is allowed to issue redeemable preference shares if the redemption rights and terms are spelt out in the articles. No redemption shall have the effect of reducing the amount of authorised capital of the offshore company. Further, shares shall not be redeemed except out of profits and fully paid for.[2] |
