351.195. Reduction of stated capital, how made.
Reduction of stated capital, how made.
351.195. 1. The reduction of the stated capital of a corporation,whether by retirement of reacquired shares or otherwise, may be made in thefollowing manner, but nothing contained in this section shall be construedto forbid the retirement of shares or the reduction of stated capital inany other manner permitted by this chapter:
(1) The board of directors may adopt a resolution setting forth theamount of the proposed reduction and the manner in which the reductionshall be effected, and directing that the question of the reduction besubmitted to a vote at a meeting of the shareholders, which may be eitheran annual or a special meeting, except that such proposed reduction neednot be adopted by the board of directors and may be directly submitted toany annual or special meeting of shareholders;
(2) Written or printed notice, stating that the purpose or one of thepurposes of such meeting is to consider the question of reducing the statedcapital of the corporation, shall be given to each shareholder of recordentitled to vote at such meeting within the time and in the manner providedin this chapter for the giving of notice of meetings of shareholders. Ifthe meeting be an annual meeting, the purpose may be included in the noticeof the annual meeting;
(3) At the meeting a vote of the shareholders entitled to votethereat shall be taken on the question of the proposed reduction of statedcapital, which shall require for its adoption the affirmative vote of theholders of at least two-thirds of the outstanding shares entitled to voteat the meeting.
2. No reduction of stated capital shall be made which would reducethe stated capital represented by shares without par value having apreferential right in the assets of the corporation in the event ofinvoluntary liquidation to an amount less than the aggregate preferentialamount provided from time to time to be payable upon such shares in theevent of such involuntary liquidation.
3. The surplus, if any, created by or arising out of a reduction ofthe stated capital of a corporation is paid-in surplus.
4. No distribution of assets to shareholders in connection with areduction of stated capital shall be made out of stated capital unless theassets of the corporation remaining after the reduction of stated capitalshall be sufficient to pay any debts of the corporation, the payment ofwhich shall not have been otherwise provided for.
5. All shares retired under this or any other section shall becomeauthorized and unissued shares of the class to which they belong, unlessthe reissue thereof is prohibited by the articles of incorporation, inwhich case the authorized shares of such class should be reduced to theextent of the shares so retired.
(L. 1943 p. 410 § 60, A.L. 1961 p. 248, A.L. 1965 p. 532, A.L. 1975 S.B. 14, A.L. 1983 S.B. 367, A.L. 2004 H.B. 1664)