Section 182 CAMA 2020
Section 182 Companies and Allied Matters Act is about Redemption of redeemable preference shares. It is under Transactions By Company In Respect Of Its Own Shares of Chapter 8 of PART B (Incorporation of Companies and Incidental Matters) of the Act.
Redemption of redeemable preference shares
(1) The provisions of this section apply with respect to the redemption by a company of any redeemable preference share issued by it under section 147.
(2) The shares are not redeemed unless they are fully paid, and redemption shall be made only out of—
(a) profits of the company which would otherwise be available for dividend ; or
(b) the proceeds of a fresh issue of shares made for the purposes of the redemption.
(3) Before the shares are redeemed, the premium, if any, payable on redemption, shall be provided for out of the profits of the company or out of the company’s share premium account.
(4) Where shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have been available for dividend, be transferred to a reserve fund, to be called “the capital redemption reserve account”, a sum equal to the nominal amount of the shares redeemed, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were paid-up share capital of the company.
(5) Subject to the provisions of this section, the redemption of preference shares may be effected on such terms and in such manner as are provided by the articles of the company or in the terms of issue of the relevant preference shares.
(6) The redemption of preference shares under this section by a company shall not be taken as reducing the amount of the company’s share capital.
(7) The capital redemption reserve fund may, notwithstanding anything in this section, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.
(8) Any redeemable share issued by a company is regarded as a preference share and the provisions of this Act with respect to preference shares shall apply to all redeemable shares.