Solvency Statement - Share Capital Reduction

The Share Capital Reduction - Guidance Notes should be read before using this document, which reflects the Companies Act 2006 provisions that came into force on 1 October 2008.

Solvency statement route for private companies

As an alternative to passing a special resolution and obtaining court approval, a private company can reduce its share capital by special resolution supported by a solvency statement made by the directors.

Documents to file at Companies House

To reduce share capital through the solvency statement route, a private company must submit to Companies House:

• the special resolution;
• the solvency statement;
• a statement of capital showing the alteration in the company's share capital in Form SH19 (sections 644 and 649);
• a further statement of the directors under section 644(5) of the Companies Act 2006 confirming that the special resolution was passed within 15 days of the date the solvency statement was made; and
• the fee, which from 1 February 2026 is £20 for a standard service or £89 for a same day service. The same day service is only available through the Companies House Document Upload Service.

Timing and what the solvency statement confirms

The solvency statement route offers a simpler and cheaper way for a company to reduce its share capital.

The solvency statement must be made no more than 15 days before the date of the resolution and must be available to members when they vote on the resolution to reduce the company's share capital.

In the statement, each director confirms their opinion that the company will be able to meet its obligations and discharge its debts over the next 12 month period, or in the event of its winding up.

Directors' liability, formal requirements and offence risk

In forming that opinion, the directors must take into account all of the company's liabilities, including any contingent or prospective liabilities.

If a director is unable or unwilling to make the solvency statement, the company cannot use the solvency statement route unless that director resigns; it may still proceed with court approval instead.

The solvency statement is governed by section 643 of the Companies Act 2006. It must be in writing, state that it is a solvency statement for the reduction of capital, be signed by each director, and state the date it is made and the name of each director.

A director commits an offence if they make a solvency statement without reasonable grounds for the opinions expressed in it and the statement is delivered to the registrar.

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