Printable Format17-6604. Reduction of capital. (a) A corporation, by resolution of its board of directors, may reduce its capital in any of the following ways by:
(1) Reducing or eliminating the capital represented by shares of capital stock which have been retired;
(2) applying to an otherwise authorized purchase or redemption of outstanding shares of its capital stock some or all of the capital represented by the shares being purchased or redeemed, or any capital that has not been allocated to any particular class of its capital stock;
(3) applying to an otherwise authorized conversion or exchange of outstanding shares of its capital stock some or all of the capital represented by the shares being converted or exchanged, or some or all of any capital that has not been allocated to any particular class of its capital stock, or both, to the extent that such capital in the aggregate exceeds the total aggregate par value or the stated capital of any previously unissued shares issuable upon such conversion or exchange; or
(4) transferring to surplus: (A) Some or all of the capital not represented by any particular class of its capital stock; (B) some or all of the capital represented by issued shares of its par value capital stock, which capital is in excess of the aggregate par value of such shares; or (C) some of the capital represented by issued shares of its capital stock without par value.
(b) Notwithstanding the other provisions of this section, no reduction of capital shall be made or effected unless the assets of the corporation remaining after such reduction shall be sufficient to pay any debts of the corporation for which payment has not been otherwise provided. No reduction of capital shall release any liability of any stockholder whose shares have not been fully paid.
History: L. 1972, ch. 52, § 77; L. 1988, ch. 99, § 37; Revived and amended, L. 1988, ch. 100, § 37; L. 2004, ch. 143, § 47; January 1, 2005.
Source or Prior Law:
17-3223, 17-3224, 17-3225; 8 Del. C. § 244.
Cross References to Related Sections:
Provisions on issuance of stock in articles of incorporation, see 17-6002 (a)(4).
Issuance of stock, see 17-6401.
Consideration for stock, see 17-6402, 17-6403.
"Surplus" and "net assets" defined with respect to determination of and increase in capital, see 17-6404.
Reliance by directors or designees upon corporation's books and records in purchasing or redeeming stock, see 17-6422.
Retirement of capital stock, see 17-6603.
Effect of increase or decrease in capital on liability of corporation or its stockholders, directors or officers, see 17-7103.
Payment of annual franchise taxes based on shareholder's equity attributable to Kansas, see 79-5401.
Partly paid shares of stock, see 17-6406.
Law Review and Bar Journal References:
"Close Corporations and the Kansas General Corporation Code of 1972," Edwin W. Hecker, Jr., 22 K.L.R. 489, 537 (1974).
"Non-SEC Whistle-Blowing Obligations of Lawyers Who Represent Organizations," John M. Burman, 46 W.L.J. 127 (2006).
CASE ANNOTATIONS
1. Cited; review of price dissenting shareholders received for stock in cash-out merger; appraisal request and jurisdiction examined. In re Hesston Corp., 254 Kan. 941, 980, 870 P.2d 17 (1994).