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CMA Final · Corporate Financial Reporting · Internal Reconstruction (Capital Reduction)

Under the Companies Act, 2013, section 66, a reduction of share capital by a company limited by shares requires which of the following as the core approval route?

A company must pass a special resolution and obtain confirmation of the Tribunal on its application. Section 66 makes Tribunal confirmation mandatory, along with notice to the Central Government, Registrar, SEBI for listed companies and creditors, so an ordinary or Board resolution alone is insufficient.

  1. AOrdinary resolution and intimation to the Registrar only
  2. BSpecial resolution and confirmation by the TribunalCorrect
  3. CBoard resolution and consent of all secured creditors alone
  4. DSpecial resolution only, with no Tribunal involvement

Explanation

Section 66(1) permits reduction by special resolution, subject to confirmation by the Tribunal on the company's application. An ordinary resolution or a Board resolution is not enough, and the Tribunal's confirmation cannot be dispensed with.

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