Effective - 28 Aug 2004
351.195. Reduction of stated capital, how made. — 1. The reduction of the stated capital of a corporation, whether by retirement of reacquired shares or otherwise, may be made in the following manner, but nothing contained in this section shall be construed to forbid the retirement of shares or the reduction of stated capital in any other manner permitted by this chapter:
(1) The board of directors may adopt a resolution setting forth the amount of the proposed reduction and the manner in which the reduction shall be effected, and directing that the question of the reduction be submitted to a vote at a meeting of the shareholders, which may be either an annual or a special meeting, except that such proposed reduction need not be adopted by the board of directors and may be directly submitted to any annual or special meeting of shareholders;
(2) Written or printed notice, stating that the purpose or one of the purposes of such meeting is to consider the question of reducing the stated capital of the corporation, shall be given to each shareholder of record entitled to vote at such meeting within the time and in the manner provided in this chapter for the giving of notice of meetings of shareholders. If the meeting be an annual meeting, the purpose may be included in the notice of the annual meeting;
(3) At the meeting a vote of the shareholders entitled to vote thereat shall be taken on the question of the proposed reduction of stated capital, which shall require for its adoption the affirmative vote of the holders of at least two-thirds of the outstanding shares entitled to vote at the meeting.
2. No reduction of stated capital shall be made which would reduce the stated capital represented by shares without par value having a preferential right in the assets of the corporation in the event of involuntary liquidation to an amount less than the aggregate preferential amount provided from time to time to be payable upon such shares in the event of such involuntary liquidation.
3. The surplus, if any, created by or arising out of a reduction of the stated capital of a corporation is paid-in surplus.
4. No distribution of assets to shareholders in connection with a reduction of stated capital shall be made out of stated capital unless the assets of the corporation remaining after the reduction of stated capital shall be sufficient to pay any debts of the corporation, the payment of which shall not have been otherwise provided for.
5. All shares retired under this or any other section shall become authorized and unissued shares of the class to which they belong, unless the reissue thereof is prohibited by the articles of incorporation, in which case the authorized shares of such class should be reduced to the extent of the shares so retired.
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(L. 1943 p. 410 § 60, A.L. 1961 p. 248, A.L. 1965 p. 532, A.L. 1975 S.B. 14, A.L. 1983 S.B. 367, A.L. 2004 H.B. 1664)