353Capital redemption reserve

353 Capital redemption reserve

353 Capital redemption reserve

(1) This section applies if CCUs are redeemed out of profits.

(2) 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.

(3) 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.

(4) 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.

(5) 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.