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Highlight the factors to consider when designing a capital reduction scheme.

Highlight the factors to consider when designing a capital reduction scheme.

Answers

Winnie
I) The prospect of restoring profitability to reasonable levels and resumption of dividends to shareholders

II) The rights of various classes of interested parties like creditors and debenture holders, preference shareholders

III) The full amount of the loss of capital to be written off

III) interests of creditors and shareholders.The reduction must be for a discernable purpose, all shareholders must be treated equitably

IV) In compliance with the Companies Act, a company may reduce its share capital subject to authorisation of the articles and confirmation by the court, the following a special resolution
Wincate 1 answered the question on October 12, 2017 at 14:22

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