CAPITAL REDEMPTION RESERVE Definition

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CAPITAL REDEMPTION RESERVE, in Great Britain, the S170 Companies Act 1985 provides that where shares of a company are redeemed or purchased wholly out of the company's profits, or by a fresh issue the amount by which the company's issued share capital is diminished on cancellation of the shares shall be transferred to a reserve called the 'capital redemption reserve'. It also provides that the reduction of the company's share capital shall be treated as if the capital redemption reserve were paid up capital of the company.

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COMPANY LIMITED BY SHARES is where the members' personal liabilities are limited to the par value of their shares. a company limited by guarantee.

NOMINAL ACCOUNTS are those accounts that are closed out each period: revenue accounts, expense accounts, and dividend or withdrawals accounts.

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