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Highlight the circumstances under which capital reduction can occur in a company.

Highlight the circumstances under which capital reduction can occur in a company.

Answers

Winnie
Where unissued shares are cancelled

If there is an accumulation of trading loss over the years which must be written off to give the business an attractive financial outlook to investors

In case there is surrender of shares by a member in circumstances which entitles the company to forfeit it's shares

If the cash ever being required for the business, a certain amount of share capital is paid back to the shareholders through a capital reduction scheme

If there are capital losses of an extensive nature requiring drastic revaluation of the assets of the company
Wincate 1 answered the question on October 12, 2017 at 14:13

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