Reduction of share capital
The power to reduce capital must be given by the articles. If no such power, the articles may be changed by a special resolution. According to section 59, the share capital may be reduced by:
a) reducing or extinguishing the liability of members for uncalled share capital; or
b) writing off lost share capital; or
c) paying off share capital which is in excess of the wants of the company; or
d) All these are to be done only by way approve by the court.
Procedure for Reduction of Share Capital
Reduction of capital is possible only by passing a special resolution and confirmation by the court. The court would inquire into the objections, if any, raised by the creditors. In this respect the court settles the list of creditors entitled to object and issues public notices (sec. 62). On hearing the objections, the court may confirm the reduction on such terms and conditions as it may dam fit (sec. 64).
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