Reduction of share capital

Reduction of share capital
The law regards the capital of a company as something sacred the general principal of law founted on principals of public policy and rigidity enforced by tribunal is that no action resulting in a reduction of capital of a company should be permited unless the reduction is efforted.

Further issue of capital or rights shares:

issue of capital of a company may take place

1.By allotment of new shares(known as rights shares).

2.by conversion of debentures or loans into shares.


1.A shares has a nominal value, whereas stock has no nominal value.

2.Stock is always flly paid-up, while shares may not be so.

3.stock is transferable in small function while shares can only be transferable in round members.

4.All shares are equal denomintion. stock may be of unequal amounts.

5.The frections or parts of stock do not bear any distinctive numbers while shares always bear distinctive numbers.

6.Shares can be directly issued to the public whereas stock cannot be issued directly.

only fully paid up shares can be converted into stock.

Publication of capital:

where any notice,advertisement,or other official publication,or any business letter, bill-head or letter paper, of a company contains a statement of the amount of thje authorised capital of the company, such document shall also contain a statement of the subscribed and the paid up capital.