[durand]

In a private ltd company a permissible capital payment can be made to redeem or purchase its own shares when
a)it has insufficient distributable profits for the purpose
b)it can raise the amount from a new issue
c)it is not legally authorized to redeem them
d)all of the above
I believe the answer is “A” BECAUSE I KNOW THAT IT CAN BE REDEEM ITS OWN SHARE WHEN IT HAS UN DISTRIBUTABLE PROFITS BUT I AM STILL NOT SURE BECAUSE I THINK INSUFFICIENT DISTRIBUTABLE AND UN DISTRIBUTABLE HAVE SOME DIFFERENCE…can someone read and see if I'm correct thanks.

[ArcSine]

You may be mis-interpreting the wording for "A". A company which has earned profits in prior years but hasn't yet distributed all of it, has "undistributed profits" (a.k.a. "retained earnings").

This is NOT the same thing as "insufficient distributable profits", which is what "A" says. "Insufficient distributable profits" is just a fancy way of saying "the company doesn't have enough to do what the question is asking."

In the spirit of the season, here's your gift... Answer A is out, because of the foregoing. That also kicks out Answer D (see why?). It's down to B or C...

[durand]

I believe its B when they proceed for a new issue.. im I correct?

[ArcSine]

Correct.