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Reduction of share capital under Sec 66 can be effected by:
AExtinguishing/reducing unpaid liability on shares
BPaying off paid-up capital in excess of requirements
CAny of the above
DCancelling paid-up capital unrepresented by available assets (lost capital)
Answer & Solution
Correct answer: C. Any of the above
1. Step 1: Sec 66 enumerates three ways of reducing capital: (a) extinguishing unpaid liability; (b) paying off excess capital; (c) cancelling lost capital.
2. Step 2: All three are permitted.
3. Step 3: Hence (D).
_Source: ICAI BoS CA Inter Paper 1, Ch 14 "Internal Reconstruction"_