Center for Community Support Development Studies

Can a limited liability company or a joint stock company increase or decrease its charter capital?

According to the law, limited companies or joint stock companies are allowed to increase charter capital and this increase of charter capital must be registered with the local registry. Meanwhile, the reduction of the charter capital of one-member limited liability companies is not allowed.
By resolution of the Board, limited liability companies with 02 members or more can reduce the charter capital in the following ways:
 Repayment of the capital contributed to the member in proportion to the capital contribution in the charter capital of the company if the business operation has been carried out continuously for 2 years from the date of business registration; And at the same time ensure that debts and other property obligations are paid in full after being returned to the members of the company;
 Acquisition of capital contribution; or
 Reduce the charter capital corresponding to the reduction of the value of the limited company assets.
In particular, under the provisions of the LDN, one-member limited liability companies shall not reduce their charter capital. In addition, the regulations on procedures for reducing charter capital of companies at the business registry are not clear and convenient.