REDUCTION OF SHARE CAPITAL. The principal provisions regarding a reduction of share capital in a company limited by shares are contained in the following Sections of the Companies (Consolidation) Act, 1908 :— Special Resolution for Reduction of Share Capital.
" IR. (1 I Subject to confirmation by the Court. a company limited by shares, if so authorised by its articles, may by special resolution reduce its share capital in any way, and in particular (without prejudice to the generality of the foregoing power) may " (al Extinguish or reduce the lia bility on any of its shares in respect of share capital not paid up : or " (l Either with or without extin guishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost or unrepre sented by available assets or "(c) Either with or without extin guishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the company, and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
" (2) A special resolution under this Section is in this Act called a resolution for reducing share capital.
Application to Court for Confirming Order " 47. W'here a company has passed and confirmed a resolution for reducing share capital it may apply by petition to the Court for an order confirming the reduction.
Addition to Name of Company of " and Reduced." " 48. On and from the confirmation by a company of a resolution for reducing share capital, or where the reduction does not involve either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, then on and from the presen tation of the petition for confirming the reduction, the company shall add to its name, until such date as the Court may fix, the words ' and reduced,' as the last words in its name, and those words shall, until that date, be deemed to be part of the name of the company : " Provided that, where the reduction does not involve either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, the Court may, if it thinks expedient, dispense altogether with the addition of the words ' and reduced.'
Order Confirming Reduction.
" 50. The Court, if satisfied, with respect to every creditor of the company who under this Act is entitled to object to the reduction, that either his consent to the reduction has been obtained or his debt or claim has been discharged or has determined, or has been secured, may make an order confirming the reduction on such terms and conditions as it thinks fit." The resolution for reduction and the order must be registered, and the resolution takes effect from the date of the registration.
The Court may require the company to publish the reasons for reduction with a view to give proper information to the public. (Section 55.) (See COMPANIES, SHARE CAPITAL.)