Reduction of share capital

The share capital account of a company is the total amount paid to the company for its shares (the aggregate amount subscribed). A fundamental principle of company law is that this share capital account must be ‘maintained’ in order to provide a measure of protection to creditors – it must not be distributed to shareholders except in narrow circumstances. A reduction in share capital is a reduction in the share capital account of a company in accordance with procedures set-out in the Companies Act 2006.

Private and public companies can reduce their share capital by passing a shareholders’ special resolution, provided that there are no relevant restrictions in the Articles of Association.

A private company must support this special resolution with a Solvency Statement of the directors, or seek confirmation of the resolution from the court. A public company’s only option is to seek confirmation of the special resolution from the court.

NOTE: After a reduction of share capital supported by a Solvency Statement there must be at least one shareholder holding non-redeemable shares.

Our Reduction of Share Capital Service provides you with all of the necessary advice and paperwork to effect a reduction of share capital. We provide clear and straightforward advice, draft all of the required documentation and make all required filings. Click the following links for a summary of the procedure for reducing share capital by Solvency Statement , or by court application.

If you are considering or have decided to reduce a company’s share capital then you will also need to consider the most appropriate way in which to effect the reduction. We would be happy to advise you in this regard.

We can provide you with a fixed quotation for preparing all of the necessary documentation.

Get in Touch

Our Reduction of Share Capital Service is suitable for public and private companies incorporated in the United Kingdom.

Our package includes:

• A review of the company’s Articles of Association and any Shareholders Agreement in relation to the planned reduction.
• Advice on your proposed course of action.
• A Solvency Statement or court application (as applicable).
• A Directors’ statement of compliance (if required).
• Directors and shareholders’ resolutions as required.
• Filings at Companies House.
• Update company registers, new share certificates as required.

Click the ‘MAKE ENQUIRY’ button below or call us on 0121 314 9102.