Victorian Consolidated Legislation

Trustee Companies Act 1984 - SECT 51

Reduction of share capital

51. Reduction of share capital



(1) A trustee company that has a reserve liability (being that portion of the
trustee company's share capital which was not capable of being called up
except in the event of and for the purposes of the trustee company being wound
up) may, subject to and in accordance with this section, reduce its share
capital by an amount not exceeding the amount of that reserve liability.

(2) Where a trustee company to which subsection (1) applies has, after the
commencement of this section, issued shares the nominal value of which is
equal to the whole or any part of the amount of the reserve liability that it
had immediately before the commencement of this section and the shares are
fully paid in cash, the trustee company may, by special resolution, reduce its
share capital by an amount not exceeding the nominal value of those shares and
may, so far as is necessary, alter its memorandum by reducing the amount of
its share capital and of its shares accordingly by extinguishing or reducing
the liability on any of its shares in respect of share capital not paid up.

(3) A reduction of capital in accordance with this section is declared to be
an excluded matter for the purposes of section 5F of the Corporations Act in
relation to the provisions of Division 1 of Part 2J.1 of the Corporations Act.

Note This section ensures that Division 1 of Part 2J.1 (Reductions in share
capital not otherwise authorised by law) of the Corporations Act will not
apply in relation to a trustee company. Section 5F of the Corporations Act
provides that if a State law declares a matter to be an excluded matter in
relation to specified provisions of the Corporations legislation, then those
provisions will not apply in relation to that matter in the State concerned.

(4) Where a trustee company issues shares in connexion with a reduction of its
share capital under this section, an amount equal to the amount received from
the issue of those shares shall be paid into the reserve fund of the trustee
company.

(5) An amount paid under subsection (4) into the reserve fund of a trustee
company that, immediately before the commencement of section 36, was a trustee
company under the Trustee Companies Act 1958, shall not be paid out of the
reserve fund before the expiration of the period of three years after the
commencement of that section.

(6) In this section, a reference to a trustee company is a reference to a
trustee company that is a company within the meaning of the Corporations Act
that is taken to be registered in Victoria.