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 number 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 buy back shares when the shares are issued, this is considered a redemption. Generally, when the shares are issued, a specific date is set for when they will be redeemed.
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 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 Add Transaction +
Select Redemption
Instructions
CAS 360 will display the Redemptions screen.
1. Share Details
| Field | Explanation |
|---|---|
| Transaction Date | Enter the date of the redemption. |
| Shareholder | Select the shareholder. CAS 360 lists the company's current shareholders. |
| Beneficial Owner | CAS 360 automatically fills in this field if there is a beneficial owner. |
| Share Type | Select the share type. CAS 360 lists the share types the shareholder holds. |
| Number of shares | Enter the number of shares affected. |
| Redemption Amount Per Share | Enter the amount the shareholder will receive from the company for each share redeemed. |
| Redemption Type | Select the type of redemption: Redeemed from company profits or Redeemed from shares issue proceeds. |
| Meeting Status | Select the shareholder's meeting status. This appears on the resolutions. |
2. Certificate Details
| Field | Explanation |
|---|---|
| Certificate Type | Select the certificate type. Options are Transaction, Balance or None. |
| Certificate Number | Enter the certificate number for the shares. This appears on the Share Certificate. |
| Certificate Location | Enter the location of the certificate. |
| Unique Numbers | Enter a unique number to assign to the shares. |
Click Save
Forms Prepared
CAS 360 will display the Document Production screen and automatically select the documents required:
- Cover Letter
- Company Change Summary
- Register of Shareholders
- Issued Journal
- Directors Minutes or Resolution
- Notice of Shareholders Meeting
- Shareholders Minutes or Resolution
- Shareholders Consent
- Share Certificate
- Extensive Shareholding List