reducing the liability of the shareholders in respect of any unpaid amount on the shares held by them
paying off any paid-up share capital which is in excess of its requirement
cancelling any paid-up share capital, which is lost or unrepresented by available assets
all of the above
Answer is Right!
Answer is Wrong!
The correct answer is D. all of the above.
A reconstruction scheme is a plan that is put in place to save a company from going into liquidation. It can involve a number of different measures, including reducing the company’s capital. This can be done in a number of ways, including:
- Reducing the liability of the shareholders in respect of any unpaid amount on the shares held by them. This means that the shareholders would no longer be liable to pay the full amount of the money that they owe on their shares.
- Paying off any paid-up share capital which is in excess of its requirement. This means that the company would pay back any money that shareholders have paid into the company over and above the amount that is required to keep the company running.
- Cancelling any paid-up share capital, which is lost or unrepresented by available assets. This means that the company would cancel any shares that have been issued but for which no money has been received.
Reducing the company’s capital can be a difficult decision to make, but it can be necessary in order to save the company. It is important to note that the reduction of capital must be approved by the shareholders and the court.