Authorized capital may be reduced by a decision of the general meeting of shareholders.
Authorized capital may be reduced only for the following purposes:
1) solely in order to eliminate losses recorded in the company’s balance sheet;
2) in order to cancel shares acquired by the company;
3) in order to pay out the company’s funds to shareholders;
4) in order to correct errors made during the formation or increase of authorized capital.
A decision to reduce authorized capital in order to pay out the company’s funds to shareholders may be adopted only at an ordinary general meeting of shareholders.
A decision to reduce authorized capital in order to pay out the company’s funds to shareholders may not be adopted if, on the date of adoption of the decision, the company is insolvent or would become insolvent after paying out the funds to shareholders.
Authorized capital shall be deemed reduced only upon registration of the amended articles of association in the register of legal entities.
If the authorized capital is reduced in order to pay out the company’s funds to shareholders, the income received by the shareholders is taxed at the time the authorized capital was increased from the company’s funds. If the authorized capital was increased by additional contributions from shareholders, the contributions withdrawn by the shareholders are not considered their income and are not taxed.