Problems on consent of shareholders for capital reduction in the private limited company

Abstract

This article aims to discuss about problems on consents of shareholders for capital reduction in the private limited company.  In addition to conditions prescribed in Sections 1224-1228 of the Civil and Commercial Code, should there be consent of the shareholders who are affected by capital reduction? The author proposes that regulations for capital reduction process should be separated into a case of reducing value of each shares and a case of reducing number of shares.  If the capital reduction is made by reducing value of each shares, it is not necessary to have consent of shareholders because all shareholders are treated equally.  However, in a case of capital reduction by means of reducing number of shares, there should be consent from shareholders whose shareholding capital will be reduced.