What are the pre-conditions of reduction of share capital of a Company?

Reduction of share capital:

As contained in section 59 of the companies Act 1994, any company limited by share if it is authorized by its articles, by passing a special resolution, having approval from the Court can reduce the share capital as follows:

1. By reducing or extinguishing the liability on any shares not paid-up;

2.Cancel any paid-up share capital which is lost or not represented on the assets;
3.  Repay the capital, which is in excess of the wants of the company;
4. Reduce the share capital and shares as required by alteration of memorandum.

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Discuss the provisions of the Companies Act, 1994 as to the issue of shares at a discount

Following rules relates to the issuance of shares at a Discount:

1.It should be an existing company which has issued share earlier;
2.Court permission must be taken and to be confirmed at Annual General Meeting;
3.Maximum rate would be 107, which is to be confirmed at Annual General Meeting;
4.The Company shall not issue share at a discount within one year from the date of commencement of business;
5.The shares to be issued within 6 months from the date of the approval of the Court to issue share at a discount.

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