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Redemption in United Kingdom

Definition of Redemption

The discharge of a mortgage.

History

A company generally reserves to itself a right of redeeming the security before the date fixed by the debenture for repayment; and accordingly a power for that purpose is commonly inserted in the conditions. But as debenture-holders, who have got a satisfactory security, do not wish to be paid off, the right of redemption is often qualified so as not to arise till (say) five years after issue, and a premium of 5% is made payable by way of bonus to the redeemed debenture-holder. Sometimes the number of debentures to be redeemed each year is limited. The selection is made by drawings held in the presence of the directors.

A sinking fund is a convenient means frequently resorted to for redemption of a debenture debt, and is especially suitable where the security is of a wasting character, leaseholds, mining property or a patent. Such a fund is formed by the company setting apart a certain sum each year out of the profits of the company after payment of interest on the debentures. Redeemed debentures may in certain cases be reissued; see Companies Act 1908 (§ 104). (2)

Maintenance of Capital: Redemption and buy-back of shares

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Redemption of shares

Consequences of redemptionFind under this subsection information about Consequences of redemption in relation to Redemption of shares.

Maintenance of Capital: Redemption and buy-back of shares

Refine your research by picking one of the below sections, including the Redemption of shares.

Redemption of shares

How is redemption effected?Find under this subsection information about How is redemption effected in relation to Redemption of shares.

Maintenance of Capital: Redemption and buy-back of shares

Redemption of shares

Find under this subsection information about redemption of shares in relation to Maintenance of Capital: Redemption and buy-back of shares.

Resources

Notes and References

  1. Encyclopedia Britannica (1911)

See Also

  • Redemption of Shares
  • Maintenance of Capital
  • Buy-back
  • Capital Payment
  • Borrowing
  • Capital Redemption Reserve
  • Share Capital
  • Share Payment
  • Equity of Redemption
  • Debenture

Further Reading



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(2015, 05). Redemption lawi.org.uk Retrieved 06, 2021, from https://lawi.org.uk/redemption/

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"Redemption" lawi.org.uk. 05, 2015. Accesed 06 2021. https://lawi.org.uk/redemption/

Emily Rowling, 'Redemption' (lawi.org.uk 2015) <https://lawi.org.uk/redemption/> accesed 2021 June 16

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Schema Summary

  • Article Name: Redemption
  • Author: Emily Rowling
  • Description: Definition of Redemption The discharge of a mortgage. History A company generally reserves to itself a right of redeeming [...]

This entry was last updated: October 24, 2016

Maintenance of Capital


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