Alteration of share capital

There are statutory provisions in Chapter 8 of Part 17 of the Companies Act 2006 (CA 2006) governing how a limited company having a share capital may alter that share capital.

Ways of altering share capital

CA 2006, s 617 only permits a limited company having a share capital to alter its share capital in certain specified ways. These include a:

•
sub-division of share capital
•
consolidation of share capital
•
reconversion of stock into shares, and
•
redenomination of share capital

Sub-division or consolidation of share capital

It is possible for a limited company having a share capital to sub-divide or consolidate that share capital in accordance with CA 2006, s 618. It is also possible for such a company to combine a sub-division and consolidation of share capital.

Sub-division is a process by which a company may change the structure of its share capital by dividing some or all of its shares into shares of a smaller nominal value. A sub-division increases the number of shares that a company has.

Consolidation is a process by which a company

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