Section 117. Reduction of share capital by private or public company

(1) A company may reduce its share capital by a special resolution if the company—

(a) sends a notice to the Director General of the Inland Revenue Board referred to in section 134 of the Income Tax Act 1967 [Act 53] and the Registrar within seven days of the date of the resolution and the notice shall state that the resolution has been passed and contain the text of the resolution and the resolution date; and

(b) meets the solvency requirements under subsection (3).

(2) The resolution and the reduction of the share capital shall take effect in accordance with section 119.

(3) The company meets the solvency requirements if—

(a) all directors of the company make a solvency statement in relation to the reduction of share capital;

(b) the statement is made—

(i) in the case of a private company, within the period of fourteen days ending with the date of the resolution but shall be within time to comply with subsection (5); or

(ii) in the case of a public company, within the period of twenty-one days ending with the date of the resolution but shall be within time to comply with subsection (6); and

(c) a copy of the solvency statement is lodged with the Registrar together with the notice required to be lodged under paragraph (1)(a).

(4) Notwithstanding subsection (1), a company need not meet the solvency requirements if the reduction of share capital is solely by way of cancellation of any paid-up share capital which is lost or unrepresented by available assets.

(5) Subject to subsection (4), a private company shall—

(a) if the resolution for reducing share capital is a special resolution to be passed by a written resolution, ensure that every copy of the resolution served is accompanied with a copy of the solvency statement; or

(b) if the resolution for reducing share capital is a special resolution to be passed in a general meeting, make the solvency statement or a copy of the solvency statement available for inspection by the members throughout that meeting; and

(c) make the solvency statement or a copy of the solvency statement available at the company’s registered office for inspection free of charge by any creditor of the company for a period of six weeks from the date of the resolution.

(6) Subject to subsection (4), a public company shall—

(a) make the solvency statement or a copy of the solvency statement available for inspection by the members at the meeting throughout the meeting at which the resolution is to be passed; and

(b) make the solvency statement or a copy of the solvency statement available at the company’s registered office for inspection free of charge by any creditor of the company for a period of six weeks from the date of the resolution.

(7) Every officer of the company who contravenes subsection (5) or (6) commits an offence.

(8) Notwithstanding subsection (7), the resolution shall not become invalid by virtue only of a contravention of subsection (5) or (6).

(9) Any requirement under paragraph (3)(c), (5)(c) or (6)(b) ceases to have effect if the resolution is revoked.

(10) A company shall advertise a notice of the reduction of the share capital in one widely circulated newspaper in Malaysia in the national language and one widely circulated newspaper in Malaysia in the English language not later than seven days from the date of the passing of the special resolution.

(11) The company and every officer who contravene subsection (10) commit an offence.