California Statement of Reduction of Capital of a Corporation
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How to fill out Statement Of Reduction Of Capital Of A Corporation?
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FAQ
The reduction of share capital is a legitimate process that must be followed by a company in India. The process involves obtaining approvals from the Board of Directors, shareholders, and the NCLT. The company must also update its records with the RoC after the reduction is approved.
There are a few ways to do a capital reduction. One way is by making payments to shareholders out of the company's capital for a value equal to what a shareholder paid in acquiring the company's shares. Another way is through a share buyback.
A reduction of share capital allows a company to reduce its issued capital without the need for each individual shareholder's consent. Another commonly used method by which a company can reduce its share capital is where the company repurchases its own shares from its shareholders. This is known as a share buy-back.
The reduction of share capital is a legitimate process that must be followed by a company in India. The process involves obtaining approvals from the Board of Directors, shareholders, and the NCLT. The company must also update its records with the RoC after the reduction is approved.
Resolution (member): reduction of share capital Shareholder resolutions to reduce or cancel a company's issued share capital by reducing (i) the number of shares, (ii) the nominal value of shares or (iii) the amount paid up on shares. Whichever resolution is used, it must be passed as a special resolution.
If the amount of paid up capital including share premium is reduced then the share capital will be debited with the amount of the reduction. If the reduction was effected by a repayment then the credit will go to cash, otherwise a reserve account will be created which is treated as a realised profit.
The solvency statement route provides a simpler and cheaper means for a company to reduce its share capital. The solvency statement must be made not more than 15 days before the date of the resolution and must be available to the members when they vote on the resolution to reduce the company's share capital.
Section 66 of the Companies Act, 2013 (as amended) governs the law for capital reduction which provides that, for a company to reduce its share capital, it should have the power under its Articles of Association (?AOA?) to do so by following the procedure laid down under such provisions.