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Share Capital Reduction 2017-12-22T11:08:16+00:00

Buyback and Redemption of Company Share Capital is Complex, and Requires Expert Advice and Due Diligence

Mature companies sometimes decide to buyback or redeem their paid-up capital after some years in the business for several reasons:

  1. The company is now very established and does not require a high paid-up capital for show of strength to creditors
  2. As the company is in a strong financial position, to distribute extra capital permanently back to the shareholders
  3. To repay or compensate shareholders who want to exit the company
  4. To pay up on dividends, or release available funds for other activities
  5. To reduce the equity exposure of the company

CorporateRoom is able to advise, document and execute on the steps to assist with buyback and reduction of paid-up capital. These steps include:

  • Compliance with Section 78A of the Companies Act
  • Check for requirement for creditors approval
  • Ensure compliance with solvency tests, publicity requirements and updated ACRA guidelines
  • Preparation of documents for the relevant authority’s approval
  • Ensure compliance with waiting periods and court order approvals

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