Case Study: Streamlining Share Capital Reduction for TKG One Pty Ltd*

Streamlining Share Capital Reduction for TKG One Pty Ltd*. Patricia Holdings assisted in reducing its share capital through an equal reduction method, ensuring compliance with ASIC regulations and the Corporate Act.

*This case study is based on an actual event, but all names, client details, and other identifiable information have been changed to maintain confidentiality. Any resemblance to actual individuals, companies, or events is intentional only in the context of the case study itself, while all specific details have been altered for privacy reasons.

Client Background:
TKG ONE Pty Ltd, established in 2003 and based in Queensland, approached Patricia Holdings with a complex challenge. The company, no longer actively trading, had a share structure of 735,000 ordinary shares valued at $735,000, distributed among eight shareholders. Their goal was to significantly reduce the share capital to just $500.

The Challenges:

1. Efficiently reduce share capital from $735,000 to $500,
2. Ensure full compliance with ASIC regulations and Corporate Act, and
3. Complete the process quickly and with minimal complications

Patricia Holdings' Solution:
Patricia Holdings worked closely with TKG ONE's accountant to provide information and support for the share reduction process. This collaboration helped the accountant determine the most suitable method to meet the company's needs. An equal reduction approach was chosen because it:

• relate only to ordinary shares; and
• applies to each holder of ordinary shares in proportion to the number of ordinary shares they hold;
• the terms of reduction are the same for each holder of ordinary shares; and
• complied with Section 256B of the Corporations Act 2001

Implementation Process:

1. Consultation and Calculation:
   Patricia Holdings provided information and support to TKG ONE's accountant, assisting them in calculating the precise reduction for each shareholder:

2. Documentation Preparation:
   Based on the calculations provided by the client's accountant, Patricia Holdings prepared all necessary documentation for ASIC, including:

• Form 2560: Notification of reduction in share capital
• Form 484: Change to company details
• Notices of meetings to shareholders and consent forms

3. ASIC Compliance Guidance:
   Patricia Holdings provided clear instructions regarding ASIC requirements, including:

• Ensuring all forms were signed with wet ink by company officeholders
• Lodging documents with ASIC at least 21 days prior to the meeting date

4. Ongoing Support:
   Patricia Holdings monitored the process, ensuring compliance with all regulatory requirements and deadlines, while the client's accountant oversaw the financial aspects of the share cancellation.

Results:

• Successful reduction of share capital from $735,000 to $500
• All ASIC notifications completed accurately and timely
• Company records updated in the ASIC database
• All relevant documents properly prepared, signed, and recorded in the company register
• Reduced company liability while protecting creditor interests

Client Testimonial:
"Patricia Holdings team’s expertise and support made the share cancellation process smooth and efficient. Their guidance ensured we complied with all regulations, and their collaboration with our accountant was invaluable." – RG, Director, TKG ONE Pty Ltd.

Conclusion:
Patricia Holdings team can provide crucial support and information for complex corporate restructuring tasks. By working closely with TKG ONE's accountant and leveraging our deep understanding of corporate law and ASIC regulations, we were able to facilitate a significant share capital reduction while ensuring full compliance and fairness to all stakeholders. This demonstrates and exemplifies our commitment to providing expert and personalised assistance for businesses across Australia.