Economics · Company Law and Accounting
Consider the following statements regarding the Capital Redemption Reserve (CRR): Statement I: According to Section 55 of the Companies Act 2013, when preference shares are redeemed out of divisible profits, a sum equal to the nominal value of the shares redeemed must be transferred to the CRR. Statement II: The CRR can be utilized for writing off preliminary expenses, issuing fully paid bonus shares, or paying dividends. Statement III: Only free reserves available for dividend can be used for transfer to CRR, and Securities Premium cannot be used for CRR transfer under Section 55. Which of the above statement(s) is/are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1I, II, and III
- 2Only I and III✓
- 3Only I and II
- 4Only I
Correct answer
Only I and III
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