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
Hirer Requires Information from the Owner Conversely the hirer requires some information from the owner whether he should send him a written request so and then like pay to hi

Betty and Veronica always fell in love with the same men. Veronica got very jealous of Betty for stealing Archie away from her and decided to start sending her anonymous

Liquidators and Receivers: The distinction between liquidators and receivers must be kept clear: (a) a receiver is a representative of secured creditors appointed by them (

Question : This is an extract of the Mauritian Patents, Industrial Design and Trademarks Act 2002. 12. Patentable inventions (1) An invention shall be patentable under

Question 1: Discuss what types of norms can be used to help judges in their interpretation of statutes. Question 2: Discuss the concepts of originalism and dynamism in

State about the Median Voter Theorem Percentage of vote necessary for a proposal to be adopted, remember Median Voter Theorem, will affect the difficult of adopting a proposal,

Rules for Loan creditors: Loan creditors and landlords are subject to special rules in certain circumstances: (a) if a person (usually a bank) lends money to the company to e

Pat Clark is the controller for Best Pharma, a publicly-held pharmaceuticals manufacturer in Wilmington, Delaware.  In early December 2011, Pat's boss, CEO Bernie Skilling, approac

Judicial and Legislative Function of Chief Justice Judicial Function However a judge of the High Court and the court of Appeal he participates in the adjudicatory proce

Compulsory Liquidation :                                       A petition is presented to the High Court under s.218 of the Companies Act.  The petition will specify one of the