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Board Resolutions for Share Premium Account Reduction or Cancellation

Board Resolutions – Share Premium Reduction

CO.SPR.02

The Share Premium Account Reduction – Guidance Notes should be read in advance of this document.

These Board Resolutions have been created for the provisions of the Companies Act 2006 for private companies which allows a reduction or cancellation in the amount of a company’s share premium account by passing a special resolution supported by a solvency statement made by the directors. Section 610(4) of the Companies Act 2006, allows a private company to use the same process as a private company uses to reduce its share capital.

The solvency statement route provides a simpler and cheaper means for a company to reduce its share premium account. The solvency statement must be made not more than 15 days before the date of the special resolution and must be available to the members when they vote on the resolution to reduce the company's share capital.

In these Board Resolutions, the board of directors proposes the reduction of the share premium account, which must then be approved by the shareholders by special resolution.

Please note that the solvency statement is only applicable to private companies, however, both private and public companies may reduce or cancel their share premium account by special resolution confirmed by court order.

These resolutions are in open format. The document contains fields which must be completed. It also contains wording options in square brackets which must be adjusted to suit your purposes.

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