Our solicitors are vastly experienced in assisting companies of all sizes to facilitate and advise upon the reduction in shareholder equity by cancelling shares, known as capital reductions. At Blackstone Solicitors, we are able to advise many different types of client, no matter the complexity of the deal.
For more information about how our team of corporate solicitors can help you with the capital reduction of your business, contact us on 0345 901 0445 or complete our online enquiry form and a member of the team will call you back at a convenient time.
There are a number of reasons why a business may wish to decrease its share capital. These can include:
- To create distributable reserves in order, for example, to allow it to pay shareholders a dividend.
- To return capital to shareholders when it isn’t being utilised or needed for operational reasons.
- As part of a company reorganisation where assets can be transferred to shareholders in a demerger.
- To reduce losses in order to pay dividends in the future.
When companies reduce their share capital, they will usually either make a transfer into a distributable reserve or repay capital to shareholders in cash or other property.
There are a number of ways in which a business can reduce its share capital. These include reducing the nominal value of shares in an issue, cancelling shares after repaying share capital on those that are not needed, writing off or mitigation of liability on any unpaid shares and the cancellation of any capital that isn’t represented by the assets of the company.
Blackstone Solicitors are known for our efficiency, attention to detail and ability to get things done; qualities much needed when pushing through and addressing the legal and tax implications of a capital reduction. We will provide professional, pragmatic advice based on our years of experience in this specialist area.
Our team will do all that is necessary to ensure your business is properly represented in any negotiations and will put your interests first at all times. The capital reduction of a business can be highly technical and can sometimes involve different areas of law and regulations; we can advise on all these areas and make sure you are in the best possible position for a successful outcome to your negotiations.
Why Legal Help is Important
It should be remembered that a capital reduction can occur in companies of any size and in any industry.
The process can be highly complex and can be considered to be an incredibly important event that will have an impact on you and the business, both in the short and long term – it is therefore imperative that you have the best legal experts at your side, not only to ensure everything progresses as it should, but also to make sure both you and the business benefits from the best possible outcome.
In a private limited company, share capital can be reduced by issuing a solvency statement. It is essential, however, that the company Articles do not explicitly prohibit any form of capital reduction and that there is at least one non-redeemable share in issue after the procedure.
If the company is a PLC, then the reduction of capital procedure is similar, but the special resolution to reduce the capital must be approved by the court.
Whatever the structure of your company, we ensure full compliance with corporate laws and regulations, so your business can complete a capital reduction on a firm financial and legal basis.
We will work with your management team and advisers to ensure all financial, tax and legal aspects of the sales process are properly addressed. We are able to assist with any aspect of the capital reduction of a business and will guide you through the technicalities in a clear and concise way. We have a team of experienced solicitors well versed in the process who are ready to assist you.
Get in Touch
Find out more about our services and how our corporate solicitors can assist you and your business by getting in touch. We have offices in Cheshire and London and are able to serve clients across the North West, including Chester and Manchester, as well as throughout the UK and also overseas.