MHHS · Business Corporations Act
Part 5 — Corporate Finance
38 Other reduction of stated capital
resolution reduce its stated capital for any purpose including,
without limiting the generality of the foregoing, the purpose of
(a) extinguishing or reducing a liability in respect of an amount
unpaid on any share,
(b) distributing to the holders of the issued shares of any class
or series of shares an amount not exceeding the stated
capital of the class or series, and
(c) declaring its stated capital to be reduced by an amount that
is not represented by realizable assets.
(2) A special resolution under this section shall specify the capital
account or accounts from which the reduction of stated capital
effected by the special resolution is to be deducted.
RSA 2000
(3) A corporation shall not reduce its stated capital for any
purpose, other than the purpose mentioned in subsection (1)(c), if
there are reasonable grounds for believing that
(a) the corporation is, or would after the reduction be, unabl e to
pay its liabilities as they become due, or
(b) the realizable value of th e corporation's assets would
thereby be less than the aggregate of its liabilities.
(4) A creditor of a corporation is entitled to apply to the Court for
an order compelling a shareholder or other recipient
(a) to pay to the corporation an amount equal to any liability of
the shareholder that was extinguished or reduced contrary to
this section, or
(b) to pay or deliver to the corporation any money or property
that was paid or distributed to the shareholder or other
recipient as a consequence of a reduction of capital made
contrary to this section.
(5) An action to enforce a liability imposed by this section may not
be commenced after 2 years from the date of the action complained
of.
(6) This section does not affect any liability that arises under
section 118.
1981 cB-15 s36