deference between Redeemable preference shares and Irredeemable preference shares

Posted on 02-04-2016        By ADMIN

deference between  Irredeemable preference shares 

1.   Redeemable preference shares are 

those preferenceshares, which can be redeemed (i.e., returned or paid back) 

even during theexistence of the company. These shares can be redeemed as

 per the terms ofissue either at a definite date after the expiry of a stipulated 

(fixed) periodor at the option of the company, i.e., whenever the company wants, after givingproper notice.


Redeemable preference shares can, be redeemed by acompany. But their redemption is subject to the conditions

a)   b)   c)   otherwiseavailable for dividend (i.e., out of the divisible profits of the company) or 

out of the proceeds of fresh issue of shares made for the purpose ofredemption.

d)    or out of the company's share premium account.


2.   Irredeemable Preference Shares: Irredeemable preference shares are those 

preference Share, which are not (i.e. refundable) until the company is woundup.

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