It is the reorganization of the company’s financial structure either internal or external. If a company has sustained a considerable loss and is unable to satisfy its creditors in full, a reconstruction scheme can be instituted to save the company from receivership or liquidation.
Capital reconstruction may include;
- Increase in the authorized share capital
- Reduction of capital
- Consolidating shares into shares of larger amounts
- Splitting of shares into smaller amounts
- Purchase or redemption of shares
- Absorption
- Amalgamation
francis1897 answered the question on February 27, 2023 at 07:05
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