Capital Reduction
/ˈkæpɪtl rɪˈdʌkʃən/
Definitions
- (n.) The legal procedure by which a company reduces its share capital with or without returning capital to shareholders.
The company undertook a capital reduction to write off accumulated losses.
- (n.) A corporate restructuring action that decreases the nominal value of shares or the number of shares in issue.
The capital reduction was approved by shareholders to improve the company’s financial position.
Forms
- capital reduction
- capital reductions
Related terms
See also
Commentary
Capital reduction requires compliance with statutory procedures to protect creditors and shareholders and often involves court approval or special resolutions.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.