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Reduction of share capital

Automatic generation of notices and minutes, as well as sending and signing, automatic updating of articles of association and the shareholder book and submission to the Brønnøysund registers directly from the platform.

Formal process

The company’s general meeting can decide on a capital reduction, either by reducing the nominal value or by deleting shares.

The purpose of the capital reduction can be:

  1. coverage of losses that cannot be covered in any other way;
  2. distribution to the shareholders or deletion of the company’s own shares; or
  3. allocation to funds to be used according to the general meeting’s decision.

For option 2. there is a distribution to the shareholders . This distribution can be equal to the reduction in share capital or higher. If the amount is higher than the reduction in share capital, the excess will be considered a dividend within the meaning of the Companies Act.

In principle, a reduction of the share capital can only take place after the expiry of a creditor period of six weeks. This means that the decision on capital reduction must be registered in the Brønnøysund registers in two stages; first the decision is registered, then there is a creditor deadline of six weeks from the time of registration, and finally – if the relationship with the creditors does not prevent this – the capital reduction can be registered as completed.

However, it is not necessary to wait for a creditor’s deadline for a decision to reduce the share capital to cover losses that cannot be covered in any other way (option 1). However, if the creditor deadline is missed, the company cannot make a decision on dividends for the next three years from the time of registration, unless the share capital has subsequently been increased by at least the same amount as the reduction. The capital reduction can also take effect without a creditor deadline if the company, at the same time as the notification of the capital reduction, reports that the share capital has been increased by new subscription of shares against deposits so that the company’s restricted equity is at least as high as before (conversion of debt is not considered a deposit).

Follow-up

The decision to increase capital must be registered on the dCompany platform ( shareholder book and transaction log ) and in the Brønnøysund registers.

The decision to reduce capital must be reported to the Brønnøysund registers at the latest two months after the decision is made, so that it does not lapse.

As mentioned above, there is basically a requirement for a creditor deadline, so that the notification must be reported in two installments to the Brønnøysund registers. The deadline of two months only applies to the first notification to the Brønnøysund registers.

Good to know

  • The dCompany platform can carry out a capital reduction with an immediately subsequent capital increase if desired
  • Where the share capital is reduced due to losses that cannot be covered in any other way, consideration should be given to carrying out the capital reduction with a creditor’s deadline to avoid the dividend restriction of three years counted from registration in the Brønnøysund registers. However, this dividend restriction does not apply if the share capital is later increased by at least the same amount as the reduction.

This is what you do

  • Enter information about the capital reduction, including how much the share capital is to be adjusted by and whether the reduction is to take place by reducing the nominal value or deleting shares
  • Send the documents for signature
  • Ask to have a coordinated register message generated (a button) and have it signed
  • If there is a creditor’s deadline, wait for the creditor’s deadline and handle any claims from creditors before the capital reduction can again be sent to the Brønnøysund registers for implementation
  • Possibly payment to shareholders after expiry of the creditor period can only take place after the capital reduction has been registered as having been carried out
  • Updated the shareholder book by pressing a button
Combine events

Combine events

With dBot you can combine free text and automated company events in the same formal process

Digital invitations

Digital invitations

Send invitations to board meetings and general meetings directly from the platform

Signature

E-signature

Sign protocols with Norwegian or Swedish BankID, e-mail or hand signature

Choose between Norwegian, English or both

Norwegian and English

Choose between Norwegian, English or bilingual documents

Reduction of share capital

Automatic generation of notices and minutes, as well as sending and signing, automatic updating of articles of association and the shareholder book and submission to the Brønnøysund registers directly from the platform.

Formal process

The company’s general meeting can decide on a capital reduction, either by reducing the nominal value or by deleting shares.

The purpose of the capital reduction can be:

  1. coverage of losses that cannot be covered in any other way;
  2. distribution to the shareholders or deletion of the company’s own shares; or
  3. allocation to funds to be used according to the general meeting’s decision.

For option 2. there is a distribution to the shareholders . This distribution can be equal to the reduction in share capital or higher. If the amount is higher than the reduction in share capital, the excess will be considered a dividend within the meaning of the Companies Act.

In principle, a reduction of the share capital can only take place after the expiry of a creditor period of six weeks. This means that the decision on capital reduction must be registered in the Brønnøysund registers in two stages; first the decision is registered, then there is a creditor deadline of six weeks from the time of registration, and finally – if the relationship with the creditors does not prevent this – the capital reduction can be registered as completed.

However, it is not necessary to wait for a creditor’s deadline for a decision to reduce the share capital to cover losses that cannot be covered in any other way (option 1). However, if the creditor deadline is missed, the company cannot make a decision on dividends for the next three years from the time of registration, unless the share capital has subsequently been increased by at least the same amount as the reduction. The capital reduction can also take effect without a creditor deadline if the company, at the same time as the notification of the capital reduction, reports that the share capital has been increased by new subscription of shares against deposits so that the company’s restricted equity is at least as high as before (conversion of debt is not considered a deposit).

Follow-up

The decision to increase capital must be registered on the dCompany platform ( shareholder book and transaction log ) and in the Brønnøysund registers.

The decision to reduce capital must be reported to the Brønnøysund registers at the latest two months after the decision is made, so that it does not lapse.

As mentioned above, there is basically a requirement for a creditor deadline, so that the notification must be reported in two installments to the Brønnøysund registers. The deadline of two months only applies to the first notification to the Brønnøysund registers.

Good to know

  • The dCompany platform can carry out a capital reduction with an immediately subsequent capital increase if desired
  • Where the share capital is reduced due to losses that cannot be covered in any other way, consideration should be given to carrying out the capital reduction with a creditor’s deadline to avoid the dividend restriction of three years counted from registration in the Brønnøysund registers. However, this dividend restriction does not apply if the share capital is later increased by at least the same amount as the reduction.

This is what you do

  • Enter information about the capital reduction, including how much the share capital is to be adjusted by and whether the reduction is to take place by reducing the nominal value or deleting shares
  • Send the documents for signature
  • Ask to have a coordinated register message generated (a button) and have it signed
  • If there is a creditor’s deadline, wait for the creditor’s deadline and handle any claims from creditors before the capital reduction can again be sent to the Brønnøysund registers for implementation
  • Possibly payment to shareholders after expiry of the creditor period can only take place after the capital reduction has been registered as having been carried out
  • Updated the shareholder book by pressing a button
Combine events

Combine events

With dBot you can combine free text and automated company events in the same formal process

Digital invitations

Digital invitations

Send invitations to board meetings and general meetings directly from the platform

Signature

E-signature

Sign protocols with Norwegian or Swedish BankID, e-mail or hand signature

Choose between Norwegian, English or both

Norwegian and English

Choose between Norwegian, English or bilingual documents

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