Redemptions

Print Friendly and PDF

 

Details

A redemption is when the par value is paid back to the purchaser of the shares.

Par Value is the apparent worth or face value of the share.

The total value and amount of shares will be reduced.

Redemption vs Share Buybacks
When a company issues shares and later decides to buy some of those shares back, this is considered a share buyback rather than a redemption.

When a company specifies that it will redeem or buyback shares when the shares are issued, this is considered a Redemption. Generally, a specific date is specified as to when the shares will be redeemed when the shares are issued.

The major difference between the two is that the shares bought back in a redemption are considered a security that is expected to be bought back by the issuer.

Example: John Brown was allotted 100 Redeemable Preference shares on the terms that the company will redeem the shares from John in 3 months. After 3 months the company redeems the shares from shares from John. You must also update this information on your own share register and in your company's annual return.

 

Navigation

From the Main Toolbar, go to Company.

Select the Company from the list.

Select Shareholders

Click 

Select Redemptions

Instructions

CAS 360 will display the Redemptions screen.

Field
Explanation 
Transaction Date
Input the date of the redemption
Shareholder

In the shareholder field, CAS 360 will display a list of the company's current shareholders

Beneficial Owner CAS 360 will automatically prefill this field if there is a beneficial owner.
Share Type

In the Share type field, CAS 360 will display a list of the share types the shareholder holds

Number of shares
Input the relevant number of shares affected
Redemption Amount Per Share

Input the amount the person will receive from the company for the each share redeemed

Redemption Type
Select the type of Redemption. Either Redeemed from company profits or Redeemed from shares issue proceeds
Meeting Status
Select the meeting status of the member which will appear on the Resolutions.
                                                      2. Certificate Details 
          Field                                       Explanation
Certificate Type  Select the Certificate type. Options range from Transaction, Balance or None. 
Certificate Number  Type the Certificate Number for the Shares, This will feature on the Allotment Journal, Share Certificate, Notice of Beneficial Ownership (if applicable) and the Declaration of Trust. 
Certificate Location Type the location of the Certificate. 
Unique Numbers Type a Unique Number to assign to the shares. 

Click 

Forms Prepared

CAS 360 will display the Document Production screen and automatically select the documents required:

  • Cover Letter
  • Company Change Summary
  • Register of Members
  • Allotment Journal
  • Directors Minutes or Resolution
  • Notice of Members Meeting
  • Members Minute or Resolution
  • Member Consent
  • Share Certificate
Was this article helpful?

Comments

0 comments

Please sign in to leave a comment.