Earlier article discussed what caused a capital reduction in a company.
In this article, we see step by step the accounting entries used in a capital reduction situation where the companys capital is not represented by its available assets.

Accounting Entries Used In Capital Reduction Where Capital Is Not Represented By Available Assets

(1) Being Amount […]

In earlier article Part 2, the capital reduction is a simple one where the company has too much capital hence wanting to reduce its surplus capital by returning to its shareholder.
In this article, we see a normal situation where a company want to do a capital reduction where its capital is not represented by its […]

A simple capital reduction is when a company wants reduce its capital as it has deemed to have too much capital and would want to return surplus cash to its shareholders.

Internal Company Reconstruction-Capital Reduction

As described, basically there are three situations

refunds any surplus capital

cancel paid up capital not represented by assets

reduces/write off uncalled capital on any […]

As accountant, we often heard term like Company XYZ is under company reconstruction. So whats really does it mean?
This article gives a basic understanding of what’s company reconstruction:
Firstly,let’s look at this term called:
Company Reconstruction:-

it is used to describe the drastic formal changes in a company’s capital structure as a result of certain circumstances.

There are […]

Unlike capital reduction, the term reconstruction normally means the sale of the undertaking of an existing company, a new company specially form for that purpose.And, reorganization is the term used to denote a rearrangement of a company’s share capital either by consolidation of shares of different classes or by the sub-division of the shares […]