Purchase Shares out of non-distributable and Reduce Capital

Purchase Shares out of non-distributable and...

Didn't find your answer?

Hi All,

After a lot of research, I have found a way to effectively distribute non-distributable reserves, however this is not something I have ever done before, and so I would be very grateful if you could tell me whether this is possible, and if so, how I go about doing it.

I would like to issue new shares paid up out of non-distributable reserves, then do a capital reduction to make this amount distributable, and then pay a dividend.

- Is there any paperwork I need to do to issue new shares and pay for them out of a non-distributable reserve. For example, does Companies House need any paperwork.

Who owns the shares if they are paid up out of non-distributable reserves?

- I know that a Solvency Statement would need to be done for Companies House when the reduction of capital is done, but what other paperwork is required by Companies House, and is there any tax effect.

Does this amount go into the P&L reserve, or does it have to go into another distributable reserve?

Then pay a dividend out.

I would be very grateful for any help you could provide.

Thank you in advance.

David

Replies (1)

Please login or register to join the discussion.

avatar
By alancrm
04th Sep 2012 14:50

Reduction of capital

Hi David,

 

Hopefully this is still relevant to you.  I am trying to research a similar, but simpler case.  On the reduction in capital, and SH19 form is required by Companies House along with a special resolution and statement of solvency from the directors.

 

The bit I remain unsure on is whether the P&L reserve is credited, or a new reserve (capital redemption reserve?) is created by the transactions.

I hope my partial answer is of help.

Any financial reporting experts out there who can help?

 

Alan

 

Thanks (0)