Unlimited company to provide for reserve share capital on conversion into limited company
📚 Law Minded summary
An unlimited company converting into a limited one can set aside part of its capital as reserve — an amount that can only ever be called up if the company is wound up.
It is a cushion held back for creditors at the end, and once designated it cannot be called for ordinary trading purposes.
An unlimited company having a share capital may, by a resolution for registration as a limited company under this Act, do either or both of the following things, namely—
(a) increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being wound up;
(b) provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up.