Which of the following cannot be utilized for the redemption of preference shares of a company

Question

Quizplus · Accepted Answer

Securities premium on fresh issue of shares cannot be utilized for the redemption of preference shares. The Companies Act allows the use of profits, reserves, or the proceeds of a fresh issue of shares for this purpose, but the securities premium specifically from a fresh issue of shares is typically reserved for purposes like writing off preliminary expenses, issue expenses, or providing for the premium payable on redemption of debentures or shares, not directly for the redemption of preference shares.

Which of the Following Cannot Be Utilized for the Redemption