A Delaware Statement of Reduction of Capital of a Corporation is a legal document that outlines the company's intention to decrease its capital or equity. This process involves reducing the total amount of shares and the corresponding value attached to those shares that a corporation has previously authorized or issued. The purpose of a Delaware Statement of Reduction of Capital of a Corporation is to formalize the decision to reduce capital and provide transparency to shareholders and regulatory authorities. This statement typically includes details such as the corporation's name, date of incorporation, registered agent, and pertinent information about the reduction plan. There are two primary types of Delaware Statements of Reduction of Capital of a Corporation: 1. Reduction of Stated Capital: This type of reduction involves reducing the par value or face value of the company's shares. Par value refers to the minimum nominal value assigned to each share at the time of issuance. The reduction of stated capital may be necessary if the company has accumulated excess capital or wants to realign its financial structure. 2. Reduction of Additional Paid-In Capital: This type of reduction involves decreasing the company's additional paid-in capital, which is the amount shareholders have paid for shares above their par value. Corporations may choose this type of reduction when they no longer require the excess funds or when they want to distribute surplus capital to the shareholders. Both types of reductions require the approval of the board of directors and, in some cases, shareholder consent. After the approval, the Delaware Statement of Reduction of Capital of a Corporation must be filed with the Delaware Secretary of State's office, along with any other required documents and fees. In summary, a Delaware Statement of Reduction of Capital of a Corporation is a document filed by a company to formalize its decision to decrease the capital or equity. The two primary types of reductions include the reduction of stated capital and the reduction of additional paid-in capital. These statements are essential for maintaining transparency and compliance with Delaware corporate laws and regulations.
Delaware Statement of Reduction of Capital of a Corporation
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§ 276. Dissolution of nonstock corporation; procedure. (a) Whenever it shall be desired to dissolve any nonstock corporation, the governing body shall perform all the acts necessary for dissolution which are required by § 275 of this title to be performed by the board of directors of a corporation having capital stock.
Section 266: Stockholder Approval of Conversions. Delaware now permits the conversion of a Delaware corporation to another form of entity, including a foreign corporation, with only the approval of a majority of its stockholders.
Section 275 - Dissolution generally; procedure (a) If it should be deemed advisable in the judgment of the board of directors of any corporation that it should be dissolved, the board, after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, shall cause ...
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§ 243. Retirement of stock. (a) A corporation, by resolution of its board of directors, may retire any shares of its capital stock that are issued but are not outstanding.
Section 278 of the code establishes a period of at least three years after dissolution during which a corporation is deemed to be ?continued.? During the three-year period, a dissolved corporation's directors can elect to follow procedures set forth in § 280 and § 281(a) of the code, or § 281(b) of the code.
(a) Every corporation may at any meeting of its board of directors or governing body sell, lease or exchange all or substantially all of its property and assets, including its goodwill and its corporate franchises, upon such terms and conditions and for such consideration, which may consist in whole or in part of money ...