Capital redemption reserve
353 Capital redemption reserve
This section applies if CCUs are redeemed out of profits.
Out of profits there is to be transferred to a reserve called the capital redemption reserve a sum equal to the nominal amount of the CCUs redeemed.
Subject to subsection (5), the provisions of this Law relating to the reduction of share capital of a co-operative apply as if the capital redemption reserve were paid up share capital of the co-operative.
Subject to subsection (5), the capital redemption reserve may be applied in paying up unissued shares of the co-operative to be issued to members of the co-operative as fully paid bonus shares.
Subsections (3) and (4) do not apply to a non-distributing co-operative.Note.
Section 448 provides that, on a winding up of a non-distributing co-operative, the surplus property of the co-operative must be distributed as required by the rules of the co-operative.
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