Reduction of stated capital
35(1)Subject to subsection (3), a corporation may by special resolution reduce its stated capital for any purpose, including for the purpose of
(a)
extinguishing or reducing a liability in respect of an amount unpaid on any share issued before a corporation is continued,
(b)
distributing to the holder of an issued share 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
(i)
an amount that is not represented by realizable assets, or
(ii)
an amount otherwise determined in respect of which no amount is to be distributed to holders of issued shares of the corporation.
35(2)A special resolution under this section shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted.
35(3)A corporation shall not reduce its stated capital for any purpose other than the purpose referred to in paragraph (1)(
c) if there are reasonable grounds for believing that
(a)
the corporation is, or would after the reduction, be unable to pay its liabilities as they become due; or
(b)
the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities.
35(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.
35(5)An action to enforce a liability imposed by this section may not be commenced after two years from the date of the action complained of.
35(6)Repealed: 2023, c.2, s.28 2023, c.2, s.28; 2023, c.2, s.155