The return of capital is when some of the consideration the shareholder was previously given is paid back to them.
Example: Homer Simpson was allotted 2 $4 ordinary fully paid shares (total value $8). After the return of capital, Homer was returned $4. Homer now holds 2 $2 ordinary fully paid shares.
|From the Main Toolbar, go to Company.||
|Select the Company from the list.||
Select Return of Capital
CAS 360 will display the Return of Capital screen.
|Input the date of the Return of Capital|
In the shareholder field, CAS 360 will display a list of the company's current shareholders
|Beneficial Owner||CAS 360 will automatically prefill this field if there is a beneficial owner.|
In the Share type field, CAS 360 will display a list of the share types the shareholder holds
Number of shares
|Input the relevant number of shares affected|
Capital Returned Per Share
|Amount returned to the shareholder per share held. Cannot be an amount more than the value paid on the shares.|
Capital reduction type
|See section below for more information|
|Select the meeting status of the member which will appear on the Resolutions.|
|Notes||Clickto add extra notes to appear on the Register of Members|
CAS 360 will display the Document Production screen and automatically select the documents required:
- Registers – Members
- Directors Meeting Minute or Resolution
- ASIC Form - Change to Company Details Form 484 Section C
- Form 2560 - Notification of reduction in share capital details
- Allotment Journal (Optional)
- Share Certificates
- Members Meeting Minute
- Members Consent
- ASIC Form 2205 - Notification of resolutions regarding shares (for Selective Return of Capital)
CAS 360 allows you to prepare documents and then notify ASIC through electronic lodgement via the Documents Screen. For more information on how to do so, click here.
Equal Reduction vs Selective Reduction
CAS 360 will automatically select between Equal or Selective reduction on the ASIC form.
An equal reduction will be selected when the following conditions are met:
- It relates only to ordinary shares.
- It applies to each holder of ordinary shares in proportion to the number of ordinary shares they hold.
- The terms of the reduction are the same for each holder of ordinary shares.
If not all conditions are met, CAS 360 will specify the transaction as a Selective reduction.
Capital Reduction Type
Single shareholder company or Multiple shareholder company.
If selecting Multiple shareholder company, a Form 2560 must be lodged before a capital reduction takes place
Note: Form 2560, cannot be lodged electronically and must be lodged on paper.
Processing a Return of Capital and Share Reduction
When processing a Return of Capital on CAS 360, it simply reduces the value of the shares, however, this process does not reduce the number of shares held.
Where a share reduction is involved, a cancellation can be processed after the return of capital forms are lodged.
When processing the Cancellation, select the cancellation type as 'Other'.