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Q：
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May capital reduction be proposed by way of an extraordinary motion?
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A：
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No. A proposal for capital reduction must be expressly stated in the notice of meeting, with a description of its principal terms and contents. It may not be introduced by way of an extraordinary or ad hoc motion at the meeting.
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Q：
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How should a company proceed if, following a capital increase or capital reduction, its assets become insufficient to cover its liabilities? Would there be any penalty if no action is taken?
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A：
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The directors shall immediately file for bankruptcy. If no such action is taken, the board of directors representing the company shall be subject to an administrative fine ranging from TWD 20,000 to TWD 100,000.
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Q：
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A company limited by shares resolved at a board meeting to issue new shares in the amount of TWD 1,000,000. However, as of the capital increase record date, the total subscription amount reached only TWD 990,000. How should this be handled?
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A：
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The company shall convene another board meeting to confirm the final amount of new shares to be issued and the record date of the capital increase, after which it may engage a certified public accountant to conduct the capital verification and issue the certification report.
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Q：
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May a company file a combined application for amendment registration when applying for a capital reduction followed by a capital increase? How should the filling period be calculated?
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A：
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The application period shall be calculated separately—within fifteen (15) days from the record date of the capital reduction and within fifteen (15) days from the record date of the capital increase—to avoid penalties. However, if the record dates of the capital reduction and capital increase do not exceed fifteen (15) days apart, a combined application for registration may be submitted.
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Q：
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May a company distribute assets other than cash to shareholders when returning capital in a capital reduction?
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A：
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When returning capital as part of a capital reduction, a company may distribute assets other than cash. However, the nature of the assets to be distributed and the amount to be offset must be approved by a resolution of the shareholders meeting (or, in the case of a limited company, with the unanimous consent of all shareholders) and shall be subject to verification and certification by a certified public accountant.
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FAQ
