alleryStart learning →The capital redemption reserve may be applied for which purpose?
AFunding day-to-day expenses
BIssuing fully paid bonus shares
CDistributing cash dividends
DPurchasing plant and machinery
Answer & Solution
Correct answer: B. Issuing fully paid bonus shares
Section 55(4) allows the reserve to be used to pay up unissued shares issued to members as fully paid bonus shares.
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