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Question
What is the maximum amount of debentures which an unlisted company, other than a NBFC and HFC, can redeem out of its capital?
Answer in Brief
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Solution
Unlisted companies are required to create Debentures Redemption Reserve equal to at least 10% of the nominal (face) value of outstanding debentures out of divisible profit. Hence, they can redeem 90% of their debentures out of capital.
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Creation of Debenture Redemption Reserve
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