Reduction of capital, Business Law and Ethics

Reduction of Capital:

 

4.1 The general rule is that it is illegal for a company to reduce its capital. This is so because such a reduction would be tantamount to reducing the security available to the company's creditors: Trevor v Whitworth (48). However, S.68 (1) authorizes a company to reduce its capital if:

a) The company's articles authorizes it to do so. If the articles do not confer the authority they can be amended by the inclusion therein of the requisite authority.

b) The company passes a special resolution to that effect. The resolution is defined by S.68 (2) as "a resolution for reducing share capital".

c) The court confirms the proposed reduction. The court's confirmation is required in order to protect the interests of the company's creditors, minority members and the general public.

Posted Date: 1/12/2013 4:27:29 AM | Location : United States







Related Discussions:- Reduction of capital, Assignment Help, Ask Question on Reduction of capital, Get Answer, Expert's Help, Reduction of capital Discussions

Write discussion on Reduction of capital
Your posts are moderated
Related Questions
Question 1: (a) The Employment Relations Act does not apply to all categories of workers. Describe. (b) What is the main procedure for registration of trade unions? Qu

Question 1: (a) What are the considerations that apply for a computer contract? (b) How is Industrial Property protected in Mauritius? Question 2: Explain the princi

Determine the levels of Policy perspective Policy perspective, analysis can be made on three levels, state-system level, the nation-state level and the decision making level. T

What is the dispute resolving mechanism Obligation to follow a treaty between states arises only when it has been concluded in a written form. Moreover, a treaty must be in a

Arbitration However this is a dispute resolution mechanism whereas disputes are settled out of the court through arbitral tribunals or arbitrators that who make arbitral words

QUESTION 1 (1) What do you understand by business ethics? (2) How can an ethical climate be improved in an organization? QUESTION 2 Explain the importance of stakeho

Imagine yourself in a situation of being encouraged to inflate your expense account. Do you think your choice would be most affected by your individual moral development or by the

Types of Capital: A company's capital at any given moment may consist of: a)      NOMINAL OR AUTHORISED CAPITAL This is the capital that is stated in the memorandum of a

Question 1 - Hatfield owned a large farm on which he grew grain. His combine was inadequate in relation to the acreage of grain that he harvested annually. As a result, on seve

I. Sammy has been under continuous employment with World Entertainment Ltd for 5 years. Last Friday Sammy was called to the Director's Office and verbally informed that h