A capital reduction lowers an entity's issued share capital — either by cancelling shares that were authorised but never allocated, or by buying back shares from existing shareholders. The platform supports both flows and keeps the capital history aligned automatically.

Choose the kind of reduction

  1. Open the entity client's detail page.
  2. Click the Contacts tab and scroll to the Capital section.
  3. Click the capital type, then click Reduce Capital.
  4. The Reduction Choice modal opens, showing the current Nominal, Issued, and Unallocated share counts. Pick one of two paths:

Reduce unallocated share capital only — green card. Visible only if you have authorised-but-unallocated shares. No shareholder is affected; you simply lower the authorised pool. This is the cleaner option when no holder needs to give up shares.

Reduce share capital from shareholders — orange card. Affects existing shareholders. You will allocate the reduction across them in the next step.

Click the card for the path you need.

Path A — reduce unallocated shares

  1. Enter the number of shares to cancel from the unallocated pool.
  2. Set the effective date.
  3. Add an optional reason for the audit trail.
  4. Click Confirm Reduction.

The unallocated count decreases by the chosen amount. Shareholder positions and percentages are unchanged.

Path B — reduce from shareholders

  1. The Allocate Reduction screen opens with an information panel explaining how allocation works.
  2. Set the effective date of the reduction.
  3. For each shareholder, enter the shares to reduce. The badge next to each row shows the maximum you can take from that holder (their current holding).
  4. The running breakdown at the top shows total allocated vs the target. The Confirm button stays disabled until the allocation is valid.
  5. Click Confirm Reduction.

The reduction is recorded in the capital history. Each affected shareholder's holding is reduced, the issued capital count drops, and the percentages of all remaining holders are recalculated.

Reverting a reduction

You cannot undo a reduction in place — the capital history is immutable so the audit trail stays trustworthy. To restore a position, allocate a new issuance to the affected shareholder via the Add Capital flow.

Tip: If the goal is to retire shares the company has just bought back from a holder, use Redeem Shares (see "How to record a share redemption") rather than reduction — it captures the buyback price and tracks the transaction as a redemption in the audit trail, which is the right shape for filings.

Note: Capital reductions are usually regulated under local company law (e.g. solvency statement, court approval, or shareholder resolution). The platform records the event but does not check legal compliance — confirm the action is permitted in the entity's jurisdiction before recording it.