Corporate and Other LawsMCQQuestion 12529 of 300
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Under Section 55 of the Companies Act, 2013, what is the maximum permissible statutory period for the redemption of preference shares, other than for infrastructure projects?

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option A — Not exceeding 20 years from the date of issue

All Options:

  • ANot exceeding 20 years from the date of issue ✓
  • BNot exceeding 10 years from the date of issue
  • CNot exceeding 25 years from the date of issue
  • DNot exceeding 30 years from the date of issue

Detailed Solution & Explanation

Correct Answer: Option **A** (Not exceeding 20 years from the date of issue) **Statutory Provision (Section 55 - Issue and Redemption of Preference Shares):** Section 55(2) mandates that no company limited by shares shall issue any preference shares which are irredeemable or redeemable after the expiry of a period exceeding twenty years from the date of their issue (extended up to 30 years for infrastructure projects subject to 10% annual redemption from 21st year onwards). Therefore, Option A is the correct legal position under the ICAI curriculum.

More Questions from Corporate and Other Laws

Under Section 77(1) of the Companies Act, 2013, within what initial statutory period must a company register a charge created on its property or assets with the Registrar of Companies (ROC)?

Under Rule 3(3) of the Companies (Acceptance of Deposits) Rules, 2014, what is the maximum aggregate limit of deposits that an eligible public company can accept from its members and the public?

Which of the following is a requirement for a company to buy back its securities under the Companies Act, 2013?

What is the tax treatment of buyback of shares by an unlisted company?

Explain the concept of differential rights and its significance in the context of buyback of securities.

What are the legal provisions governing the buyback of securities by a company in India?

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