The legal system for reducing the capital of private funds companies - a comparative study

The reduction of the capital of private funds companies is a measure taken by the public authority. It is based on serious economic reasons and reasons for the reduction of the company's nominal capital, a certain amount, accompanied by the approval of the competent authority, and the company's creditors objecting to the decision. The company uses its capital to reduce its capital for several reasons. It may resort to this measure because of the increase in capital from its actual need, or because of the lose it incurs. The reduction of the company's capital is different from that of its shares, as it uses the shares only in cases where the legislator permits the issuance of shares instead of the shares that have consumed their nominal value. As in the case of companies that acquire a concession by investing in a public facility. The reduction is also different from the case of the company distributing the profits of the sham, as this process detracts from its capital, but it is illegal by law and requires the civil and criminal liability of those who carry out this process. The capital of private equity companies may be reduced in several ways. A reduction may be made by cancelling a certain number of shares of the company, by reducing the nominal value of its shares or by buying the company for its shares. The Iraqi legislator has taken the first way only. The Jordanian legislator has only taken the second method, both the Egyptian and French legislators of the company shall reduce their capital, in all the said ways. The company must take into account the reduction of its capital as stipulated in the law of the conditions and procedures, as the reduction should not lead to the descent of the capital of the company from the minimum prescribed by law and take into account the principle of equality of shareholders and should be done by A decision of the General Authority of the Company in accordance with the majority stipulated by the law, as well as the need to obtain the approval of the competent authorities as a register of companies in Iraqi legislation. The reduction of capital may affect the interests of the Company's creditors. This may lead to a reduction in the general guarantee of the capital of the company, so the comparative legislation provides the right of the creditors of the company, whether they are holders of loan bonds or otherwise to object to the reduction decision in accordance with special procedures, and the minority shareholders may object to the reduction decision if Was also affected by their interests, as they may in accordance with the law of Iraqi companies to appeal the decision whether administrative or judicial.