Share Capital Reduction Templates

Overview

The solvency statement route is a simpler and cheaper way for a private company to reduce its share capital than using the court approval procedure. A private limited company (not a public company) can reduce its share capital by passing a special resolution supported by a solvency statement made by the directors, in line with the Companies Act 2006.

This section brings together the core templates you need for a share capital reduction using the solvency statement route, including board approvals, shareholder approvals, the solvency statement itself and the Companies House filings.

When to Use These Templates

Best for:

Private limited companies looking to reduce share capital without going to court.
Tidying up or restructuring the balance sheet (for example, eliminating accumulated losses).
Returning surplus capital to shareholders where the solvency statement test can be satisfied.

What this section covers

Guidance on the solvency statement route to share capital reduction.
Board resolutions to approve the reduction and approve the solvency statement.
A written shareholder resolution and general meeting minutes for passing the special resolution.
The directors’ solvency statement and the section 644 statement by the directors.
The Companies House filings, including form SH19 and a covering letter.

Each template in this section is drafted to be fully compliant with the Companies Act 2006 requirements for this procedure.

🔀 Document Toolkit: Typical Sequence (may vary)

Step 1 - Understand the procedure and conditions

Start with Share Capital Reduction - Guidance Notes.
This explains the solvency statement route, when it can be used and the key steps and filings involved.

Step 2 - Board approval and directors’ statements

Use Share Capital Reduction Board Resolution Templates to record the directors’ decision to recommend and implement a share capital reduction using the solvency statement route.
Prepare and approve the directors’ statements using:
- Solvency Statement - Share Capital Reduction; and
- Section 644 - Statement By Directors.

Step 3 - Shareholder approval

Obtain member approval for the reduction by passing a special resolution using either:

Written Resolution Template – Share Capital Reduction (for a written resolution procedure); or
General Meeting Minutes - Share Capital Reduction (where the resolution is passed at a general meeting).

Step 4 - Filing at Companies House

File the required documents at Companies House, typically including:

CHF - SH19 (Section 644 & 649) - Statement Of Capital;
Section 644 - Statement By Directors; and
Solvency Statement - Share Capital Reduction, as required.
Use Letter To Companies House - Share Capital Reduction as the covering letter to submit the filings.

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All Making Changes to Share Capital