Share Capital Reduction

Transfer value from your company to its shareholders lawfully and tax-efficiently with expert legal support.

There are a number of reasons why you might want to reduce your company’s share capital – to create distributable reserves or as part of a demerger. But this manoeuvre can be complex. You must follow certain rules and there is a risk of becoming exposed to capital gains taxes. With the help of our corporate law experts you can reduce your company’s capital in the right way and in a tax-efficient manner.

Increase funds available for dividends with a share capital reduction

Our team of corporate solicitors can help your business by:

  • Advising on share capital reductions that tie in with your broader business strategy and relationship with your shareholders, including whether the proposed capital reduction will have the desired outcome.
  • Checking your existing documents, for example the articles of association, to ensure that a capital reduction is possible, and amending these if necessary.
  • Showing you how you can pay dividends even if your business has accumulated losses.
  • Unblocking the payment of dividends by creating distributable reserves from which you can pay dividends.
  • Helping you to free up cash on your books so you can return surplus capital to shareholders.
  • Helping you buy back or redeem shares by reducing your company’s capital.
  • Preparing all the necessary documents for a share reduction including directors’ solvency statements, board resolutions and Companies House forms, and obtaining any necessary court order.
  • Helping you ensure that no tax charge arises as a result of the reduction in capital.

What our clients say

We pride ourselves on delivering an excellent service for clients, but don’t just take our word for it.

How could you benefit from a reduction of share capital?

If your business is going through a lean patch, but you or your investors would welcome a dividend return, we can help you do this in a risk-free way by reducing your share capital.

Your company may be capital-rich because a proposed acquisition has been unsuccessful, or because your group has gone through a demerger. Instead of leaving cash in your company, remove it safely and efficiently by a reduction of share capital.

Proceeding with a reduction of share capital without appropriate legal support can mean that a return of capital will attract a charge to capital gains tax. We’ll show you how to structure the transaction to avoid an unwanted charge.

To carry out a share capital reduction lawfully, certain documents and even a court order may be needed before the transaction is carried out. We can draft and explain the necessary documents and fill out the required forms for you so that you don’t get caught out.

Who we help: Founders, directors, investors, and shareholders across a range of businesses

We support a wide range of UK-based companies in a number of sectors. Getting the right legal team in place if you are considering a reduction in share capital is essential to achieve a smooth and pain-free transaction. We have experience in all aspects of corporate transaction, whatever the size and trading history of your business.

Why choose Harper James Solicitors?

We can assist you with a strategic analysis of your business and the proposed transaction, put in place all the necessary documents and infrastructure and make the required registrations and complete the transaction on your behalf.

But our support doesn’t have to stop there.

Our holistic approach to working with businesses means that we’ll look at your wider strategy, taking you from a single corporate transaction to a whole host of business legal support that will help you scale. You’ll have access to not only our corporate experts, but our teams of commercial solicitors, intellectual property experts, commercial property solicitors, data protection experts and much more. Our aim is to partner with you and help your business every step of the way so that you get an integrated legal service that works towards your long-term goals.

Plus, we have all been recruited from top UK law firms or from large international businesses and have advised clients both as external advisors and as in-house corporate counsel. Find out more about the team here:

Pricing plans

Our three transparent pricing packages are designed to give you the widest possible access to high-quality legal advice, whatever the size and nature of your business:

City

Straightforward access to senior solicitors at a competitive rate.

An affordable solution for businesses needing one-off legal support. Receive ‘City’ partner-level expertise at a fraction of ‘City’ prices.

Enterprise

Have legal peace of mind for £189 per month with additional support from £125 per hour.

A monthly subscription legal support package specifically designed for start-ups and smaller businesses.

On-Demand

Providing you with priority access to a dedicated panel of highly experienced solicitors.

Fully account managed quarterly subscription service for businesses with more complex legal needs.

What next?

Please leave us your details and we’ll contact you to discuss your situation and legal requirements. There’s no charge for your initial consultation, and no obligation to instruct us. We aim to respond to all messages received within 24 hours.

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A national law firm

We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

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