CA Inter P2 · Chapter 4 · Question 7 of 11
Under section 55, a company limited by shares cannot issue preference shares that are:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Irredeemable
Explanation
Section 55(1) states that no company limited by shares shall issue any preference shares that are irredeemable. Preference shares must generally be redeemed within twenty years from the date of issue. A longer period is allowed for prescribed infrastructure projects, subject to annual redemption of a portion at the option of the holders.
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