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Protection of General Public:
It may happen that a resolution reducing a company's capital was passed in circumstances which indicate that the shareholders had not been properly and correctly informed about the real causes of the reduction. In such a case, it is desirable that the general public, as potential members of the company, should be told the truth about the reduction. Section 70 (2) (b) empowers the court where appropriate, to make an order requiring the company to publish, as the court directs, the reason for reduction or such other information in regard thereto as the court may think expedient with a view to giving proper information to the public and whether the court thinks fit, the causes which led to the reduction.
The court order confirming the reduction and the relevant minute as approved by the court, must be delivered to the registrar for registration. S71 (2) provides that, on the registration of the order and minute and not earlier than the resolution for reducing share capital as confirmed by the order so registered shall take effect.
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