Conversion of Preference Shares into equity

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JAISON JACOB . K (Querist)
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05 June 2010 Hi,

Can u pls explain me the procedure for conversion of preference shares to equity shares.

For what period redeemable pref shares can be issued.

If the equity shares are to be issued at premium, should the company requires sufficient reserves and surplus in books.

Any other conditions there to be fullfilled?

Thanks in Advance

Jaison

aditi daga

aditi daga (Expert)
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05 June 2010 2. redeemable preference shares can be issued for a maximum period of 20 years.(Section 80)

3. Regarding issue of shares at a premium, Section 78 does not place any restriction on issue of shares at a premium. however, the premium amt recd has to be kept in a separate account called securities premium account.