Commonwealth Consolidated Acts Commonwealth Consolidated ActsA company may only redeem redeemable preference shares:
(a) if the shares are fully paid - up; and
(b) out of profits or the proceeds of a new issue of shares made for the purpose of the redemption.
Note 1: For a director's duty to prevent insolvent trading on redeeming redeemable preference shares, see section 588G.
Note 2: For the criminal liability of a person dishonestly involved in a contravention of this section, see subsection 254L(3). Section 79 defines involved .