Increase or reduction of capital

(1) Subject to any limitations in the Memorandum or Articles and subject to sub-sections (3) and (4), the capital of a company incorporated under this Act may, by a resolution of directors, be– (a) increased by transferring an amount of the surplus of the company to capital; or (b) reduced by– (i) returning to members any amount received by the company upon the issue of any of its shares, the amount being surplus to the requirements of the (ii) cancelling any capital that is lost or not represented by assets having a realisable value; or 42 (iii) transferring capital to surplus for the purpose of purchasing, redeeming or otherwise acquiring shares that the directors have resolved to purchase, redeem or otherwise acquire. (2) No reduction of capital shall be effected that reduces the capital of the company to an amount that is less than the sum of– (a) the aggregate par value of– (i) all outstanding shares with par value; and (ii) all shares with par value held by the company as treasury shares; and (b) the aggregate of the amounts designated as capital of– (i) all outstanding shares without par value; and (ii) all shares without par value held by the company as treasury shares that are entitled to a preference, if any, in the assets of the company upon liquidation of the company. (3) No reduction of capital shall be effected under sub- section (1), unless the directors determine that immediately after the reduction– (a) the company will be able to satisfy its liabilities as they become due in the ordinary course of its business; and International Business Companies[CAP. 270 43 (b) the realisable value of the assets of the company will not be less than its total liabilities, other than deferred taxes, as shown in the books of account, and its remaining and, in the absence of fraud, the decision of the directors as to the realisable value of the assets of the company is conclusive, unless a question of law is involved.