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Capital Markets & Transactions

Capital Reduction — NCLT Scheme Advisory

Accumulated losses, stranded securities premium, capital that should go back to shareholders — capital reduction cleans the balance sheet where buy-backs cannot. We design the scheme, run the NCLT approval process, and handle the accounting, tax analysis, and filings through to completion.

NCLTapproval process fully managed
Balance-sheetcleanup — losses, premium, structure
Schemedesigned for tax and creditor outcomes
End-to-endpetition through ROC filings

When this matters.

The company with accumulated losses

Years of losses sit in the P&L and block dividends indefinitely. A reduction wipes the slate — we design the scheme and run the NCLT process.

The stranded securities premium

Premium collected but unusable. Reduction unlocks it — with the creditor process and accounting handled correctly.

The selective capital return

You need to return capital to some shareholders, not all. A selective reduction does what a buy-back cannot — we structure and execute it.

What we do.

01

Scheme design

Selective vs. non-selective reduction, creditor treatment, and the accounting outcome — designed for your specific balance-sheet problem.

02

NCLT petition

Drafting, filing, and representation through the tribunal process — hearings, directions, and the confirmation order.

03

Creditor & shareholder process

Meetings, notices, and the documentation the NCLT requires — managed on a calendar.

04

Accounting treatment

Scheme accounting coordinated with your auditors — the reduced capital reflected correctly from the effective date.

05

Tax analysis

Capital gains, deemed dividend, and cost-base implications for the company and shareholders — mapped before the scheme is finalised.

06

Post-approval filings

ROC filings, register updates, and the clean capital structure.

The regulatory frame.

The law that governs this work.

  • Companies Act, 2013 — Sec 66
  • NCLT Rules — petition procedure and hearings
  • Income-tax Act — capital gains on reduction, deemed dividend analysis
  • Accounting Standards — scheme accounting treatment

How we work.

STEP 01

Design

The scheme structured for your balance sheet, creditors, and tax outcome.

STEP 02

Petition

NCLT filing and representation through to confirmation.

STEP 03

Implement

Creditor process, accounting, and the effective date.

STEP 04

Close

ROC filings and the clean register.

Questions we hear.

Why not just do a buy-back?

Different tools. Reduction handles accumulated losses and balance-sheet cleanup that buy-backs cannot touch; buy-backs return cash to exiting shareholders. We advise which fits.

Does it need NCLT approval?

Yes — Section 66 requires NCLT confirmation. We run the full petition process.

How long?

Four to eight months including the NCLT process, depending on the tribunal's calendar and creditor objections.

Will creditors object?

They can. We assess creditor risk upfront and structure the scheme — including creditor meetings where needed — to carry it through.

Talk to us

Start with a conversation.

Tell us where your company is headed. A partner — not a sales rep — will respond.

Request a consultation