reduction of capital

reduction of capital

a company's capital may be lawfully reduced in two ways:
  1. (1) by extinguishing or reducing the liability of its members on any uncalled capital; or
  2. (2) by repaying to them the nominal value of their shares.

Where a company has suffered losses, it can cancel paid-up shares on the ground that they are unrepresented by available assets. A reduction requires a special resolution; it must be authorized by the articles and confirmed by the courts.

References in periodicals archive ?
The merger and the new scheme, which was sanctioned earlier this week, became effective after the registration of Xstrata's reduction of capital stock.
Despite the planned reduction of capital spending, information technology-related investment is likely to increase 25.0% in fiscal 2001, 3.9 percentage points more than the previous year's projected rise.
He pointed out that portfolio changes in Chemicals were well on target, with USD4.4 billion completed or contracted, and forecast a reduction of capital employed in the business of USD5.7 bln, or more than 40% by the first half of next year.
Certain other steps to reduce capital costs of nuclear power plants further, such as financing, siting, and site-specific issues, are not covered by the report."Reduction Of Capital Costs Of Nuclear Power Plants"OECD, Paris, 2000 - ISBN 92-64-17144-4 - FF 240 - GBP 24 - USUSD 38 - DM 72 - ?
A gloomy forecast has also led to a reduction of capital projects at Abitibi-Price Inc.
Also, shareholder value reduction of capital of Centerra Gold Inc.
The plan, which also includes reduction of capital investment to 400 billion yen or less in fiscal 2002, reflects streamlining efforts amid declining electricity demand, it said.

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