A simultaneous operation of reduction and increase of the share capital of a company, usually to offset losses. The reduction of capital aims to clean up the company’s accounts so as not to accumulate losses, and can be achieved by reducing the nominal value of the shares or by maintaining the nominal value and reducing the number of shares. Thus, in the balance sheet, the capital better reflects the company’s real situation. If after this reduction, the share capital is less than what the company needs to operate, the capital can be increased with new funds.
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