Ø The rules regarding redemption of preference share are stated below:
I. Such shares shall not be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purpose of the redemption.
2. Such shares shall not be redeemed unless they are fully paid up.
3. The premium, if any, payable on redemption shall be provided for out of the profits of the company.
4. Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue of shares, they shall be transferred to a reserve account.