Redemption of preference shares

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  1. Sujan2erwgferer

    Sujan2erwgferer New Member

    For redemption of preference shares there is a clause that: A sum equivalent to the nominal amount of shares being redeemed shall be transferred to the Capital Redemption Reserve.

    My question is: After preference shares get redeemed where the nominal amount of shares come from to be transferred to the Capital Redemption Reserve.

    Doesn’t a company return nominal value to shareholders while redemption in order to transfer the same value to the Capital Redemption Reserve?
     
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