Capital reduction

In some cases, it may be desirable to reduce the issued capital of a BV, for example, when the actual value of the shares has decreased. This often occurs with older BV's that were incorporated years ago, or a few years after a tax-neutral contribution has taken place. The issued capital can be reduced in two ways: by lowering the nominal value per share (also known as par value reduction or afstempelen), or by cancelling shares. The nominal value per share is stated in the articles of association of the BV. To reduce it, an amendment to the articles is required. The difference between the nominal value and the actual value is then paid out to the shareholder(s).

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In some cases, the BV has a share premium reserve (agioreserve). In that case, this reserve can first be converted into share capital before it can be paid out to the shareholder(s). When a capital reduction involves repayment to the shareholder(s), capital protection rules apply. This means that a reduction can only take place if the equity of the BV exceeds the statutory or contractual reserves that must be maintained according to the law or the articles of association. Your accountant will prepare this so-called balance sheet test for you. In addition, the board must carry out a distribution test. The board may not approve the reduction if it knows or should reasonably foresee that, following the distribution, the BV will no longer be able to meet its (short-term) liabilities.

If a capital reduction is required, the notary will prepare a deed of capital reduction (statutory amendment) for you. Because we work with a safe IT-portal, this can be arranged entirely online.

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