District of Columbia Statement of Reduction of Capital of a Corporation

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Multi-State
Control #:
US-1083BG
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Word; 
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Description

Stated Capital is the nominal value (or "par" value) of all the outstanding shares of a corporation. Generally, it is an amount equal to the cash consideration (or equivalent fair value of property or past services) received by a corporation in exchange for the issue of shares.
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How to fill out Statement Of Reduction Of Capital Of A Corporation?

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FAQ

Resolution (member): reduction of share capital Shareholder resolutions to reduce or cancel a company's issued share capital by reducing (i) the number of shares, (ii) the nominal value of shares or (iii) the amount paid up on shares. Whichever resolution is used, it must be passed as a special resolution.

Capital Reduction Vs Shares Buyback Capital reduction attempts to reduce the tradable shares of the company, whereas through shares buyback, the company repurchases its shares from the market. The solvency statement provision doesn't allow shareholders to take any action against capital reduction.

A reduction of share capital allows a company to reduce its issued capital without the need for each individual shareholder's consent. Another commonly used method by which a company can reduce its share capital is where the company repurchases its own shares from its shareholders. This is known as a share buy-back.

A reduction of share capital allows a company to reduce its issued capital without the need for each individual shareholder's consent. Another commonly used method by which a company can reduce its share capital is where the company repurchases its own shares from its shareholders. This is known as a share buy-back.

Example of Capital Reduction Company ABC announces a share buyback and buys back 500,000 of its shares. These shares no longer trade publicly and reduce the number of shares outstanding the company has. Company ABC now has (1,250,000 - 500,000) = 750,000 shares outstanding.

If the amount of paid up capital including share premium is reduced then the share capital will be debited with the amount of the reduction. If the reduction was effected by a repayment then the credit will go to cash, otherwise a reserve account will be created which is treated as a realised profit.

The reduction of share capital is a legitimate process that must be followed by a company in India. The process involves obtaining approvals from the Board of Directors, shareholders, and the NCLT. The company must also update its records with the RoC after the reduction is approved.

The reduction of share capital is a legitimate process that must be followed by a company in India. The process involves obtaining approvals from the Board of Directors, shareholders, and the NCLT. The company must also update its records with the RoC after the reduction is approved.

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District of Columbia Statement of Reduction of Capital of a Corporation