COMPANIES ACT, 1929

595

The payment shall be made only for such period as may

be determined by the Board of Trade, and that period

shall in no case extend beyond the close of the half year

next after the half year during which the works or
buildings have been actually completed or the plant
provided:

The rate of interest shall in no case exceed four per cent.

per annum or such other rate as may for the time being

pe prescribed by Order in Council:

The payment of the interest shall not operate as a
reduction of the amount paid up on the shares in respect

of which it is paid:

The accounts of the company shall show the share

capital on which, and the rate at which, interest has been

paid out of capital during the period to which the accounts

relate:

Nothing in this section shall affect any company to which 57 & 58 Vict
the Indian Railways Act, 1894, as amended by any cia. ’
subsequent enactment, applies.

(2) If default is made in complying with proviso (g) to sub-
section (1) of this section, the company and every officer of the
company who is in default shall be liable to a fine not exceeding
fifty pounds.
Reduction of Share Capital.

55.—(1) Subject to confirmation by the court, a company limited
by shares or a company limited by guarantee and having a share
capital may, if so authorised by its articles, by special resolution
reduce its share capital in any way, and in particular, without
prejudice to the generality of the foregoing power, may—

{a) extinguish or reduce the liability on any of its shares in

respect of share capital not paid up; or
either with or without extinguishing or reducing liability
on any of its shares, cancel any paid-up share capital
which is lost or unrepresented by available assets; or
either with or without extinguishing or reducing liability
on any of its shares, pay off any paid-up share capital
which is in excess of the wants of the company,
and may, if and so far as is necessary, alter its memorandum by
reducing the amount of its share capital and of its shares accordingly.

(2) A special resolution under this section is in this Act refer
to as ‘‘a resolution for reducing share capital.”

56.—(1) Where a company has passed a resolution for reducing
share capital, it may apply by petition to the court for an order
confirming the reduction.

(2) Where the proposed reduction of share capital involves
either diminution of liability in respect of unpaid share capital or
the payment to any shareholder of any paid-up share capital, and
in any other case if the court so directs, the following provisions shall
have effect, subject nevertheless to the next following sub-section ;(—

special resolu-
ion for reduc-
tion of share
capital.

Application to
court for con-
firming order,
objections by
creditors, and
settlement of
list of objecting
creditors.