Co-operatives Act 2009

This section applies if CCUs are redeemed out of profits.

Subsections (4) and (5) do not apply to a non‑distributing co‑operative.

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.

The provisions of this Act 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.

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.