(1) A company may reduce its share capital in a way that is not otherwise authorised by law if the reduction:
Note 2: Sections 258A-258F deal with some of the other situations in which reductions of share capital are authorised. Subsection 254K(2) authorises capital reductions involved in the redemption of redeemable preference shares and subsection 257A(2) authorises reductions involved in share buy-backs.
Note 3: For a director's duty to prevent insolvent trading on reductions of share capital, see section 588G.
(2) The reduction is either an equal reduction or a selective reduction. The reduction is an equal reduction if:
(3) In applying subsection (2), ignore differences in the terms of the reduction that are: