Redeemable Preference Shares

In case Issue of preference shares under the Companies Act 1956, there is no question of guarantee for return. the rate of dividend and redemption amount, terms everthing have to be approved by the Board and should be metnioned over share certificate.

you may check the board resolution, application form etc.

Dear Mr.Suresh,

Thanks for reply. The preference share certificates have distinctive share numbers, and payout value. Suppose if I buy 800 shares @ Rs.10/share, i.e., Rs. 8000/- invested, the share certificate mentions Rs.16,000/- as redemption value and redemption date (6 years from the date of investment). Is it now safe to invest.

With best regards.,

Debashis Dhar

It is still not safe in case of liquidation of company (before 6 years from the date of investment).

because the payment to preference share holders & equity share holders is made at last.

so do check before invetment whether is there any plan for closure of that company in near future.

hello friends ,   i got an offer to invest in a redeemable preference share from a company  from kolkota,the company is very new in the name  called     cemendia marketing ltd    they are offering double ther capital at  56 month    ,is it wise to invest there     some one from kolkota    and others  pls let me know at the earliest

with regrds

p m sarma