Reduction of share capital pdf

COA: It was a reduction; there should be separate class meeting. A company cannot use the funds or money which it has raised from the shareholders to pay dividends Illegal return of capital to the shareholders Fraud on the creditors as the company would be less able to pay its debts. No dividend shall be payable to the shareholders of any company except out of profits or pursuant to section 60 sec 60 3 c. Art of Table A. Conditional right - depends on the existence of profits - decision is a matter of internal management If declared debts owed by the company to the shareholders; Cannot be revoked, cancelled or reduced Hilton International - D should be paid out of profits - No D; if co.

Marra Development Ltd - Profits for payment of dividends need to be available at the time the dividends are declared and not necessary available when the dividend is actually paid Profits belonging to a subsidiary could not be applied for the payment of its holding Sec 2 a Every director or manager who permitted the payment of such dividend would be guilty; Sec 2 b Directors maybe personally liable to compensate the creditors.

Article 99 Its declaration does not create a debt May revoke before payment. Open navigation menu. Close suggestions Search Search. User Settings. Skip carousel. Carousel Previous. Carousel Next. What is Scribd? Explore Ebooks. Bestsellers Editors' Picks All Ebooks. Explore Audiobooks. Bestsellers Editors' Picks All audiobooks. Explore Magazines. Editors' Picks All magazines.

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Report this Document. Description: company law in malaysia. Flag for inappropriate content. Download now. Original Title: Reduction of Share Capital. Related titles. Carousel Previous Carousel Next. Jump to Page. Search inside document. Generally a company is prohibited from reducing its share capital. Bhupender Singh Kaushal. Karan Veer Singh. Wycliffe Mc'Odongo. Fernando Garabedian. Manish Kumar. Syahirah Ali. Ian Clark. Noman Qureshi.

Venkat Vyshak B R. Karen Aduviri. Rachit Agarwal. For instance, a share of Rs 10 on which Rs 6 has been paid up, now being reduced to a fully paid share of Rs 6 and no entry is needed.

Where any paid up share capital is being reduced without reducing the liability on the shares, there is journal entry. For instance, a share of Rs. Where any paid up share capital is being reduced the liability on the shares, for instance, a share of Rs. Where any paid up share capital is being refunded to share holders without reducing the liability on shares, for instance, a share of Rs.

In order to write off these fictitious assets, a portion of Capital is reduced. When there are accumulation of revenue losses as a result of a series of bad trading years, unsound investments, etc.