Question

21) while granting approval to any scheme of capital reduction the court may direct the company to add
the following words to its name for such perlod as it thinks fit​

Answer 1

Explanation:

Reduction of share capital is often resorted to by companies for internal restructuring or altering their capital structure; it entails reduction of issued, subscribed and paid up share capital (either equity shares or preference shares or both) of a company. The following are the more likely situations of capital reduction:

Capital reduction with payout;

Capital reduction without payout; and

Selective capital reduction for a certain class of shares, with or without payout.

Answer 2

The complete question is

While granting approval to any scheme of capital reduction the court may direct the company to add the following words to its name for such period as it thinks fit.

A) And reduced

B) Unclaimed and reduced

C) Liquidation

D) Limited and reduced

The correct answer is

option is A) And reduced

While approving any theme of Capital Reduction, the court might direct the corporate to feature the words “and Reduced” to its name for such amount because it thinks fit.

• Thus, once getting ready the record of the company once Capital reduction, the words “and reduced” ought to be more to its name.
• National Company Law judicature Bench, Chandigarh (NCLT) has approved the theme of Capital Reduction undertaken by Escorts restricted vide its order dated Gregorian calendar month 23, 2021.
• The company is allowed by its Article of Association to scale back the share capital. 2. Issue Notice to carry Board of Directors Meeting to approve the theme of Reduction of Capital
• A capital reduction account may be a temporary account open simply to hold out internal reconstruction.
• It represents the sacrifices created by the shareholders, debenture holders and creditors.
• Also, any appreciation within the worth of assets is attributable to the present account

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