The Companies (Reduction of Share Capital) Order 2008

• Citation: S.I. 2008/1915
• Sections: 3

Section 1

(1) This Order may be cited as the Companies (Reduction of Share Capital) Order 2008 and comes into force on 1st October 2008.

(2) In this Order, “ the Act ” means the Companies Act 2006.

Section 2

A solvency statement under section 643 of the Act must—

(a) be in writing,

(b) indicate that it is a solvency statement for the purposes of section 642 of the Act, and

(c) be signed by each of the directors.

Section 3

(1) If an unlimited company reduces its share capital—

(a) the prohibition in section 654(1) of the Act does not apply, and

(b) a reserve arising from the reduction is to be treated for the purposes of Part 23 of the Act as a realised profit.

(2) If a private company limited by shares reduces its share capital and the reduction is supported by a solvency statement but has not been the subject of an application to the court for an order confirming it—

(a) the prohibition in section 654(1) of the Act does not apply, and

(b) a reserve arising from the reduction is to be treated for the purposes of Part 23 of the Act as a realised profit.

(3) If a limited company having a share capital reduces its share capital and the reduction is confirmed by order of the court—

(a) the prohibition in section 654(1) of the Act does not apply, and

(b) a reserve arising from the reduction is to be treated for the purposes of Part 23 of the Act as a realised profit unless the court orders otherwise under section 648(1) of the Act.

(4) This article is without prejudice to any contrary provision of—

(a) an order of, or undertaking given to, the court,

(b) the resolution for, or any other resolution relevant to, the reduction of share capital, or

(c) the company’s memorandum or articles of association.