The first is to withdraw shares, that is, the company buys shares unilaterally or by agreement between the company and shareholders, and the recovered shares are no longer issued and cancelled.
Second, it is a share merger, that is, a number of shares are merged into one share or less.
Stock cancellation can be divided into compulsory cancellation and arbitrary cancellation. Compulsory cancellation is the legal share extinction, which means that the company unilaterally destroys its issued shares by purchasing, drawing lots or other means. According to the agreement between the company and the shareholders, any cancellation is made in the articles of association, and both parties agree to destroy the shares.
Extended data:
Cancellation condition
Under normal circumstances, once the shares are issued, the shareholders may not withdraw their shares, and the issuing company may not purchase its own shares, but the cancellation of shares is allowed under the following circumstances:
(1) When the company suffers heavy losses, it can reduce certain capital according to the shares held by shareholders;
(2) When the company is divided into several companies, the original shares may be cancelled and the new shares after the division shall be delivered to the shareholders;
(3) According to the Articles of Association, the shares shall be cancelled with the profits distributed by shareholders. If a mining company is about to be dissolved due to the exhaustion of mineral resources, it shall gradually repurchase shares with profits in advance according to the company's articles of association to simplify the final settlement procedure.
(4) According to the redemption clause in the sales contract signed by the company's shareholders, repay the principal and interest and recover the shares after the specified time. For any of the above cancellation methods, a general meeting of shareholders must be held in advance to make a special resolution on cancellation.
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