The main cognition of the company's capital reduction rules

Capital reduction belongs to directors' business judgment in common law system, while it is often allocated to special resolutions of shareholders' meeting in civil law system. If it is based on directors' business judgment, it is often much more effective to regulate directors' behavior than to regulate static balance sheet accounts. If it is a resolution of the shareholders' meeting, the procedural cost of capital reduction will increase, and the original purpose of the law may not be much better. It will be a trend to leave the decision to reduce capital to the judgment of directors.