A reduction of share capital means that a limited company lowers its share capital. It can be done to cover a loss, to repay capital to shareholders or to set aside funds in a reserve.
The reduction can be carried out by cancelling shares (cancellation of shares) or by lowering the shares' quota value. The decision is made by the general meeting and often requires permission from Bolagsverket or a court. The change is recorded as a share ledger event.
Cancellation of shares means that shares are withdrawn and cease to exist, often to reduce share capital.
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Share capital is the capital the shareholders contribute to a company in exchange for shares.
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Quota value is a limited company's share capital divided by the number of shares.
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The general meeting is the highest decision-making body in a limited company, where shareholders make decisions.
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