Capital reduction, also known as the reduction of capital, is a restructuring process whereby a company reduces its shareholder equity through activities such as repurchasing shares or decreasing share capital to distribute assets to shareholders or to eliminate losses.
In the context of finance and economics, contraction can refer to various scenarios including the distribution of assets and economic downturns. It is important to distinguish these different contexts to understand the implications fully.
A disproportionate distribution occurs when some shareholders receive cash or other property while others see an increase in their proportionate interests in the assets or earnings and profits of the corporation. This typically leads to an unequal allocation of the corporation's resources among its shareholders.
A dividend in specie refers to a type of dividend that is paid out in forms other than cash. Typically, this can include the distribution of assets, shares, property, or any other physical items that represent the value payable to shareholders.
Liquidation, also known as winding-up, refers to the process of distributing a company's assets among its creditors and members, which ultimately leads to the dissolution of the company. The process can be voluntary or court-ordered.
Financial instruments that represent ownership or debt and provide the holder with a right to receive financial returns or an interest in the profits or assets of an enterprise.
Voluntary liquidation, also known as voluntary winding-up, is a process where a company's directors choose to dissolve the company, usually to terminate its operations and distribute its assets.
Winding-up is the process of dissolving a company by liquidating its assets to pay off creditors and distributing any remaining assets to shareholders.
