Below is reply received when we ask "In Malaysia, procedure to redeem preference shares", how accurate is it?
To redeem preference shares in Malaysia, the procedure typically involves the following steps:
1. Review the Company's Articles of Association: Start by reviewing the company's Articles of Association, which is a legal document containing the rules and regulations governing the company's operations. It will outline the specific provisions regarding the redemption of preference shares.
2. Check Redemption Provisions: Examine the terms and conditions related to the redemption of preference shares. This includes any specific provisions regarding notice period, redemption price, timing, and any other relevant requirements.
3. Obtain Board Approval: The redemption of preference shares generally requires approval from the company's board of directors. A board resolution should be passed, authorizing the redemption process and specifying the terms of redemption.
4. Serve Redemption Notice: Provide a written notice to the preference shareholders, specifying the company's intention to redeem the shares. The notice should include relevant details such as the redemption price, date, and any additional instructions or requirements.
5. Make Redemption Payment: On the specified redemption date, the company is required to make the payment to the preference shareholders in accordance with the terms outlined in the notice. This payment typically includes the redemption price and any accrued dividends or interest, if applicable.
6. Update Company Records: Once the redemption payment has been made, update the company's records to reflect the redemption of preference shares. This involves updating the share register, capital accounts, and any other relevant documentation to reflect the reduced number of outstanding preference shares.
7. File Required Documents: Submit the necessary documents to the Companies Commission of Malaysia (SSM) within the prescribed timeframe. The specific documents required may vary depending on the circumstances and the type of company. It is advisable to consult with a qualified professional or legal advisor to ensure compliance with all regulatory requirements.
It's important to note that the exact procedure may vary depending on the specific circumstances, company structure, and provisions outlined in the Articles of Association. It is recommended to consult with a legal professional or corporate secretary familiar with Malaysian company law for accurate guidance and compliance.
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