The Companies Act No. 17 of 2015Section 523 of The Companies Act No. 17 of 2015: Financing of redemption
(1) Redeemable shares of a limited company can be redeemed only out of—(a) distributable profits of the company; or
(b) the proceeds of a fresh issue of shares made for the purposes of the redemption.
(2) Subject to subsection (5), any premium payable on redemption of shares in a limited company is payable out of distributable profits of the company.
(3) Where in pursuance of this section, a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares up to the nominal value of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not for the purpose of any enactments relating to stamp duty be deemed to be increased by the issue of shares in pursuance of this subsection.
(4) Despite subsection (3), where new shares are issued before the redemption of the old shares, the new shares shall not, so far as relates to stamp duty, be deemed to have been issued in pursuance of this subsection unless the old shares are redeemed within one month after the issue of the new shares.
(5) If the redeemable shares were issued at a premium, any premium payable on their redemption can be paid out of the proceeds of a fresh issue of shares made for the purposes of the redemption, up to an amount equal to—
(a) the aggregate of the premiums received by the company on the issue of the shares redeemed; or
(b) the current amount of the share premium account of the company including any sum transferred to that account in respect of premiums on the new shares, whichever is the less.
(6) The amount of the share premium account of the company is reduced by an amount equal to, or amounts equal to the aggregate amounts equal to, the amount of any premium payable under subsection (2).
Check the current authoritative text and amendment history before relying on this provision.
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