Comparison of court-approved vs non-court-approved capital reduction method in Singapore?

Difference between court-approved vs non-court-approved capital reduction method?

Does court-approved method differ from non-court-approved capital reduction?

Does non-court-approved method differ from court-approved capital reduction?

• The choice between a court-approved or non-court-approved capital reduction method is for the company to make.
• Generally, the court-approved method is preferred by companies due to its finality. Once the capital reduction is approved by the court, it becomes more difficult for creditors to challenge such a decision on the basis of unfairness.
• Furthermore, as previously mentioned, there would be less potential liability on the part of the board of directors, as there is no need to prepare a solvency statement.
• The non-court approved method is simpler, faster, and requires no payment of fees to the court.

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