Reduction of the share capital

Content

Why would a company reduce its share capital?

Sometimes a company may have reasons for reducing the share capital. It could for example be a shareholder who wants to be bought out of the company and therefore turns in his shares against payment (redemption). The share capital is thereby reduced accordingly. Another reason may be that the company has made a loss. The loss can be reduced by transferring assets from the share capital.

Do you want to reduce the share capital to a minimum of 50 000 kronor?

From 1 April 2010 the requirement of the share capital in private limited companies is reduced from 100 000 to a minimum of 50 000 kronor. If you already have a private limited company with a share capital of 100 000 kronor it will be possible to reduce it to minimum 50 000.

If you want to reduce the share capital due to the lowered requirements you must follow the general rules on reduction of the share capital. There is no simplified way of doing it.

Reduction of the share capital

1. Write a proposal

The board of directors prepares a proposal for reduction which will be the foundation for the shareholders on the shareholders' meeting.

2. Make the decision

The shareholders' meeting makes the decision regarding the reduction.

3. Notify Bolagsverket

When the shareholders' meeting has decided on the reduction, the board of directors shall notify Bolagsverket of the decision. The notification must take place within four months of the date of the decision.

4. Bolagsverket registers the decision of the reduction

Through registration of the decision of the reduction Bolagsverket reduces the share capital. In certain cases it is also required that the company applies for authorization to implement the reduction.

5. Application for authorization in certain cases

If the reason for the reduction of the share capital is repayment to the shareholders or transfer to a free fund, the company must apply for authorization with Bolagsverket to implement the decision of the reduction.