Sample Special Resolution for Reduction of Share Capital

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Document Overview

A Special Resolution for Reduction of Share Capital is a written decision by the shareholders of a company to reduce the company’s issued share capital

The reduction can take different forms, such as:
1. Cancelling shares that are lost or no longer represented by assets,
2. Reducing the nominal (par) value of shares,
3. Buying back shares from shareholders and cancelling them,
4. Returning surplus capital to shareholders.

The purpose of a share capital reduction is to allow a company to:
1. Reorganize its capital structure – e.g., adjust share values to better reflect the actual assets of the company.
2. Eliminate losses – cancel shares not backed by assets to clean up the balance sheet.
3. Return excess funds to shareholders – where the company has surplus capital it does not need.
4. Facilitate restructuring – such as during mergers, demergers, or business reorganizations.
5. Improve financial ratios – e.g., reducing share capital can strengthen per-share earnings or net asset value.

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Sample Special Resolution for Reduction of Share Capital

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