
 Union of India - Act
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 The National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016
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 UNION OF INDIA
   
 India
 
 The National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016
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 Rule THE-NATIONAL-COMPANY-LAW-TRIBUNAL-PROCEDURE-FOR-REDUCTION-OF-SHARE-CAPITAL-OF-COMPANY-RULES-2016 of 2016
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* Published on 15 December 2016
* Commenced on 15 December 2016
 The National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016
 
 Published vide Notification No. G.S.R. 1147(E) , dated 15th December, 2016
 
 Ministry of Corporate Affairs
 
 G.S.R. 1147(E) . - In exercise of the powers conferred by sub-section (1) and (2) of section 469 read with section 66 of the Companies Act, 2013 (
 18 of 2013 
 ) the Central Government hereby makes the following rules namely:-
 
### 1. Short title and Commencement.
(1) These rules may be called the National Company Law Tribunal (Procedure for reduction of share capital of Company) Rules, 2016.
 
(2) They shall come into force on the date of their publication in the Official Gazette.
 
(3) The words and expressions used in these rules but not defined and defined in the Companies Act, 2013 (hereinafter referred to as the Act) or in the Companies (Specification of Definitions Details) Rules, 2014 or the National Company Law Tribunal Rules, 2016 shall have the meanings respectively assigned to them in the Act or the said rules.
 
### 2. Form of application or petition for Reduction of share capital under section 66.
(1) An application to the Tribunal to confirm a reduction of share capital of a company shall be in Form No. RSC-1 and fee shall be, as prescribed in the Schedule of fee to these rules.
 
(2) An application to confirm a reduction of share capital of a company shall be accompanied with -
 
(a) the list of creditors duly certified by the Managing Director, or in his absence, by two directors, as true and correct, which is made as on a date not earlier than fifteen days prior to the date of filing of an application showing the details of the creditors of the company, class-wise, indicating their names, addresses and amounts owed to them;
 
(b) a certificate from the auditor of the company to the effect that the list of creditors referred to in clause (a) is correct as per the records of the company verified by the auditor;
 
(c) a certificate by the auditor and declaration by a director of the company that the company is not, as on the date of filing of the application, in arrears in the repayment of the deposits or the interest thereon; and
 
(d) a certificate by the company's auditor to the effect that the accounting treatment proposed by the company for the reduction of share capital is in conformity with the accounting standards specified in section 133 or any other provisions of Act.
 
(3) Copies of the list of creditors shall be kept at the registered office of the company and any person desirous of inspecting the same may, at any time during the ordinary hours of business, inspect and take extracts from the same on payment of the sum of rupees fifty for inspection and for taking extracts on payment of the sum of rupees ten per page to the company.
 
### 3. Issue of notice and directions by the National Company Law Tribunal.
(1) The Tribunal shall, within fifteen days of submission of the application under rule 2, give notice, or direct that notice be given to -
 
(i) the Central Government, Registrar of Companies, in all cases, in Form No. RSC-2;
 
(ii) the Securities and Exchange Board of India, in the case of listed companies in Form No. RSC-2;
 
(iii) the creditors of the company, in all cases in Form No. RSC-3; seeking their representations and objections, if any.
 
(2) The notice under clause (iii) of sub-rule (1) shall be sent, within seven days of the direction given under that sub-rule or such other period as may be directed by the Tribunal, to each creditor whose name is entered in the list of creditors submitted by the company about the presentation of the application and of the said list, stating the amount of the proposed reduction of share capital and the amount or estimated value of the debt or the contingent debt or claim or both for which such creditor's name is entered in the said list, and the time within which the creditor may send his representations and objections.
 
(3) The Tribunal shall along with directions under sub-rule (1) give directions for the notice to be published, in Form No. RSC-4 within seven days from the date on which the directions are given, in English language in a leading English newspaper and in a leading vernacular language newspaper, both having wide circulation in the State in which the registered office of the company is situated, or such newspapers as may be directed by the Tribunal and for uploading on the website of the company (if any) seeking objections from the creditors and intimating about the date of hearing.
 
(4) The notice under sub-rule (3) shall state the amount of the proposed reduction of share capital, and the places, where the aforesaid list of creditors may be inspected, and the time as fixed by the Tribunal within which creditors of the company may send their objections:
 
 Provided that the objections, if any, shall be filed in the Tribunal within three months from the date of publication of the notice with a copy served on the company.
 
(5) The company or the person who was directed to issue notices and the publication in the newspaper under this rule shall, as soon as may be, but not later than seven days from the date of issue of such notices, file an affidavit in Form No. RSC- 5 confirming the despatch and publication of the notice.
 
(6) Where the Tribunal is satisfied that the debt or claim of every creditor has been discharged or determined or has been secured or his consent is obtained, it may dispense with the requirement of giving of notice to creditors or publication of notice under this rule or both.
 
### 4. Representation by Central Government, Registrar etc. under sub-section (2)  of section 66.
 - If the authorities or the creditors of the company referred to in clause (i) , clause (ii) and clause (iii) of sub-rule (1) of rule 3 desire to make any representation under sub-section (2) of section 66, the same shall be sent to the Tribunal within a period of three months from the date of receipt of notice and copy of such representation shall simultaneously be sent to the company and in case no representation has been received within the said period by the Tribunal it shall be presumed that they have no objection to the reduction.
 
### 5. Procedure with regard to representations and objections received.
(1) The company shall submit to the Tribunal, within seven days of expiry of period upto which representations or objections were sought, the representations or objections so received along with the responses of the company thereto.
 
(2) The Tribunal may give such directions as it may think fit with respect to holding of any enquiry or adjudication of claims or for hearing the objection or otherwise.
 
(3) At the hearing of the application, the Tribunal may, if it thinks fit, give such directions as may deem proper with reference to securing the debts or claims of creditors who do not consent to the proposed reduction, and the further hearing of the petition may be adjourned to enable the company to comply with such directions.
 
### 6. Order on application and Minute thereof.
(1) Where the Tribunal makes an order confirming a reduction, the order confirming the reduction and approving the minute may include such directions or terms and conditions as the Tribunal deems fit .
 
(2) The order confirming the reduction of share capital and approving the minute shall be in Form No. RSC-6 on such terms and conditions as may be deemed fit.
 
(3) The Certificate issued by the Registrar under sub-section (5) of section 66 shall be in Form No. RSC-7.
 
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 Schedule of Fees
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 Sl. No.
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 Section of the Companies Act, 2013
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 Nature of application/ petition
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 Fees in Rs.
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 1.
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 Sub-Section (1)  of Section 66.
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 Application for reduction of share capital.
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 5,000/-
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 Form No. RSC-1
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 [Pursuant to rule 2(1) ]
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 Company Application No. ...... of ...... 2 .....
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 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Ltd
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 Application under section 66 for confirming
 
 the reduction of share capital
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 The petitioner herein submits:-
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 1. The above named company, the applicant herein (hereinafter
 
 called 'the company') was registered on the ....... day of \_\_\_\_\_
 
 , under the provisions of the [Companies Act, \_\_\_\_\_] as a company
 
 limited by shares/ limited by guarantee with a share capital.
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 2. The registered office of the company is situate at ........
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 3. The main objects of the company are [\_\_\_\_\_\_\_\_\_\_].
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 4. The capital of the company is Rs. .... divided into ........ shares of Rs. ......... each, of which ........... shares have been issued and have been fully paid-up or credited as fully paid (or have been paid up to the extent of Rs ... per share).
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 [Note: Where there is more than one class of shares, the petition should set out the classes of shares and state specifically whether there is or there is not any priority as to capital]
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 5. By article(s)  .......... of the articles of association of the company, it is provided that the company may, from time to time, by special resolution, reduce its capital in any manner permitted by law.
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 6. Brief information in respect of financial position of the company; qualification, reservation or adverse remark or disclaimer made by the auditor in his report, if any, details of any pending inspection, inquiry or investigation against the company under the Companies Act, 2013.
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 7. [Set out reasons for reduction.]
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 8. By a special resolution of the company, duly passed in accordance with section 66(1)  of the Companies Act, 2013, at a general meeting thereof held after due notice as provided in the Act on the ........... day of... ...... .20 .... it was resolved
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 [Here set out the resolution]
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 9. Details about
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 (i)  the number of members present and voting at such meeting and number of shares or voting power held by them;
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 (ii)  the number of members who voted in favour of the resolution for reduction of share capital and the number of shares or voting power held by them;
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 (iii)  the number of members who voted against the resolution and the number of shares or voting power held by them;
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 10. [Here set out whether the reduction of share capital involves extinction or reduction of any liability in respect of unpaid share capital or cancellation of an paid-up share capital which is lost or is unrepresented by available assets or the payment to any shareholder of any paid-up share capital]
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 11. The form of the minute proposed to be registered under section 66(5)  is as follows:
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 [Here set out the proposed minute]
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 12. The applicant therefore prays :
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 (1)  That the reduction of capital resolved on by the special resolution set out in paragraph \_\_\_\_\_\_\_\_ above be confirmed;
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 (2)  That to this end all directions necessary and proper be made and given;
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 (3)  That the proposed minute be approved; and
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 (4)  That such further or other orders be made in the premises as to the Tribunal shall seem fit.
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 Dated ...........
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 Applicant or his authorized representative
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 Attachments:-
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 (i)  List of creditors
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 (ii)  Certificate by the auditor w.r.t. creditors' list
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 (iii)  Certificate and declaration w.r.t. company not being in arrears in repayment of deposits
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 (iv)  certificate by auditor with regard to confirming with accounting standards
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 (v)  Any other attachment.
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 Form NO. RSC-2
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 [Pursuant to rule 3(1) (i) and (ii)]
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 Notice to Central Government, Registrar etc in
 
 respect of application for reduction of share capital of M/s
 
 \_\_\_\_\_\_\_\_\_(Company) |
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 To
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 The Central Government/
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 The Registrar of Companies/
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 [in all cases]
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 The Securities and Exchange Board of India/
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 [as may be applicable]
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 You are requested to take notice that an application has been
 
 presented to the Tribunal at ............... (Bench) , on the
 
 ............... day of ............... 20......... for confirming
 
 the reduction of the share capital of the above company from Rs.
 
 ............... to Rs. ................ A copy of the application
 
 along with its attachments is enclosed.
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 You are hereby informed that representations, if any, in
 
 connection with the application may be made to the Tribunal
 
 within three months from the date of receipt of this notice. Copy
 
 of the representation may simultaneously be sent to the concerned
 
 company.
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 In case no representation is received within the stated period
 
 of three months, it shall be presumed that you have no
 
 representation or objection to make on the application.
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 Authorized Signatory
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 Dated this ......... day of ................ 20...
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 Place
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 Enclosures : Copy of application along with all attachments
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 Form No. RSC - 3
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 [Pursuant to Rule 3(1) (iii)]
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 Before the National Company Law Tribunal Bench at
 
 \_\_\_\_\_
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 Company Application No. ............... of
 
 20.....
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 ............... Ltd.-Applicant
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 Notice to Creditors
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 To
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 ..........................................
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 ..........................................
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 You are requested to take notice that a petition was presented
 
 to the Tribunal at ................, on the ............... day
 
 of ............... 20......... for confirming the reduction of
 
 the share capital of the above company from Rs. ...............
 
 to Rs. ................ and. In the list of creditors given by
 
 the company to have been prepared on the............... day of
 
 ............... 20....., your name is entered as a creditor for
 
 Rs. ................ (the nature of the debt or claim to be
 
 stated).
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 If you have any objection to the application or above stated
 
 details, the same may be sent (alongwith supporting documents)
 
 along with details about your name and address and the name and
 
 address of your Authorised Representative, if any, to the
 
 undersigned at .............. within three months of date of this
 
 notice.
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 In case no objections are received as indicated above, the
 
 above entry in the list of creditors will, in all the proceedings
 
 under the above petition to reduce the share capital of the
 
 company, be treated as correct.
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 Dated ...............
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 Authorised Representative for the Company
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 {|
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 Form No. RSC – 4
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 [Pursuant to Rule 3(3) ]
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 Before the National Company Law Tribunal Bench at
 
 \_\_\_\_\_
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 Company Application No. ............... of
 
 20.....
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 .......... Ltd. ----- Applicant
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 Publication of Notice
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 Notice may be taken that an application was presented to the
 
 Tribunal at ............... (Bench) , on the ............... day
 
 of ............... 20......... for confirming the reduction of
 
 the share capital of the above company from Rs. ...............
 
 to Rs. ................
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 The notices to individual creditors have been issued. The list
 
 of creditors prepared on the............... day of
 
 ............... 20..... by the company is available at the
 
 registered office of the company and at ----- for inspection on
 
 all working days during 11 AM to 4 PM between
 
 ----------------------- (days when the inspection would be
 
 available).
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 If any creditor of the company has any objection to the
 
 application or the details in the list of creditors, the same may
 
 be sent (alongwith supporting documents) and details about his
 
 name and address and the name and address of his Authorised
 
 Representative, if any, to the undersigned at ..............
 
 within three months of date of this notice.
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 If no objection is received within the time stated above,
 
 entries in the list of creditors will, in all the proceedings
 
 under the above petition to reduce the share capital of the
 
 company, be treated as correct.
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 It may also be noted that a hearing has been fixed for \_\_\_\_\_
 
 (day)  \_\_\_\_\_ (date) on which the Tribunal shall hear the
 
 application. In case any creditor intends to attend the hearing
 
 he should make a request along with his objections, if any.
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 Authorised Representative for the company
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 {|
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 Form No. RSC - 5
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 [See Rule 3(5)  ]
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 Before the National Company Law Tribunal Bench at
 
 \_\_\_\_\_
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 Affidavit on dispatch and publication of
 
 notice
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 I............................... (name, etc.), do
 
 solemnly affirm and say as follows :--
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 1. I did on the ............... day of ...............
 
 20...... despatched a copy of the notice now produced and shown
 
 to me and marked 'B' upon each of the respective persons whose
 
 names, addresses and descriptions appear in the list of creditors
 
 filed on the............... day of ............... 20...... by
 
 sending such copies by registered or Speed post to their
 
 respective addresses appearing in the said list, and the postal
 
 receipts and the acknowledgments [including (if any) the covers
 
 returned as undelivered] now produced and shown to me and marked
 
 'C' to 'Cn' are the receipts and acknowledgments received from
 
 the post office in respect of the said registered letters.
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 2. A true copy of the notice marked 'D' has been published in
 
 the issue(s)  of............... (state the newspapers) dated the
 
 ............... 20.....
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 Solemnly affirmed
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 (Sd.)...................
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 {|
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 Form No. RSC - 6
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 [See Rule 6(2) ]
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 Before the National Company Law Tribunal Bench at
 
 \_\_\_\_\_
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 Company Application No. ............ of 20.....
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 ............ Ltd. - Petitioner
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 Before the Hon'ble Member (s)  ...............
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 Order confirming Reduction of Share Capital
 
 and Approving Minute
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 Upon the application of ............. Ltd. presented on the
 
 ............... day of ............... 20..... [upon hearing
 
 Shri. ............. Authorised Representative for the applicant,
 
 and upon reading the said application and upon perusing (here set
 
 out the newspapers) containing the notice of the date of hearing
 
 of this petition, and upon hearing Shri
 
 .............................. Authorised Representative for the
 
 creditor(s)  [or, (where there is no appearance) none of the
 
 creditors appearing in person or by the Authorised
 
 Representative], and the Tribunal being satisfied with respect to
 
 every creditor that either his consent to the reduction has been
 
 obtained or his debt or claim has been discharged or has
 
 determined or has been secured,
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 This Tribunal Do Order:
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 (1)  That the reduction of the share capital of the above
 
 company resolved on and effected by the special resolution passed
 
 at a general meeting of the said company held on the
 
 ............... day of ............... 20....., which resolution
 
 was in the words and figures following, viz..
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 [Here set out the resolution]
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 be and the same is hereby confirmed.
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 (2)  [Terms and conditions, if any] Where the Tribunal confirms
 
 the reduction subject to any terms and conditions, such terms and
 
 conditions should be set out, as well as any directions that the
 
 Tribunal may think fit to give regarding the use of the words
 
 'and reduced' or the publication of the reasons for reduction,
 
 the order being suitably cast in such cases.
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 (3)  That the minute set forth in the schedule hereto be and is
 
 hereby approved.
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 (4)  That a certified copy of this order including the minute
 
 as approved be delivered to the Registrar of Companies within
 
 thirty days of receipt of the order.
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 \*Dated this ............... day of ................ 20.....
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 Schedule
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 (Here set out the minute)
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 Form of Minute
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 The capital of \_\_\_\_\_\_\_\_\_\_ Ltd., is henceforth Rs.
 
 ............... divided into........................... shares of
 
 Rs. ............... each, reduced from Rs. ...............
 
 divided into ............... shares of Rs. ............... each.
 
 At the date of the registration of this minute ...............
 
 shares numbered ............... etc., have been issued and are
 
 deemed to be fully paid (and the remaining ............... shares
 
 are unissued).
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 [Note:- 1. The words 'and reduced' are to be added only where
 
 the order so directs.]
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 2. If all the shares of a class are not issued, the minute
 
 should state the serial numbers of the issued shares. Partly paid
 
 shares should also be distinguished by their serial numbers and
 
 the amounts paid thereon should be stated. The serial numbers of
 
 shares with calls in arrears and of forfeited shares should also
 
 be stated.]
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 (By the Tribunal)
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 Registrar.
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 \*Date of the order to be the date of the approval of the
 
 minute.
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 {|
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 Form No. RSC -7
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 [See Rule 6(3) ]
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 Before the National Company Law Tribunal Bench at
 
 \_\_\_\_\_
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 Company Petition No................ of 20.....
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 ................ Ltd.
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 -Petitioner
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 Certificate of Registration of Order and Minute
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 It is certified that that the order of the Tribunal at
 
 ............... dated the .................... 20......
 
 confirming the reduction of the share capital of the above named
 
 company from Rs. ............... divided into ...............
 
 shares of Rs. ............... each, to Rs. ...............
 
 divided into ............... shares of Rs. .............. each,
 
 and the minute approved by the Tribunal showing, with respect to
 
 the share capital of the above company as altered, the several
 
 particulars required by the above Act were registered by the
 
 Registrar of Companies on the ............... day of
 
 ............... 20.....
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 Dated ...............
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 (Sd.) .................
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 Registrar
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