New York Laws
Article 5 - Corporate Finance
516 - Reduction of Stated Capital in Certain Cases.

(a) Except as otherwise provided in the certificate of incorporation,
the board may at any time reduce the stated capital of a corporation in
any of the following ways:
(1) by eliminating from stated capital any portion of amounts
previously transferred by the board from surplus to stated capital and
not allocated to any designated class or series of shares;
(2) by reducing or eliminating any amount of stated capital
represented by issued shares having a par value which exceeds the
aggregate par value of such shares;
(3) by reducing the amount of stated capital represented by issued
shares without par value; or
(4) by applying to an otherwise authorized purchase, redemption,
conversion or exchange of outstanding shares some or all of the stated
capital represented by the shares being purchased, redeemed, converted
or exchanged, or some or all of any stated capital that has not been
allocated to any particular shares, or both. Notwithstanding the
foregoing, if the consideration for the issue of shares without par
value was fixed by the shareholders under section 504 (Consideration and
payment for shares), the board shall not reduce the stated capital
represented by such shares except to the extent, if any, that the board
was authorized by the shareholders to allocate any portion of such
consideration to surplus.
(b) No reduction of stated capital shall be made under this section
unless after such reduction the stated capital exceeds the aggregate
preferential amounts payable upon involuntary liquidation upon all
issued shares having preferential rights in the assets plus the par
value of all other issued shares with par value.
(c) When a reduction of stated capital has been effected under this
section, the amount of such reduction shall be disclosed in the next
financial statement covering the period in which such reduction is made
that is furnished by the corporation to all its shareholders or, if
practicable, in the first notice of dividend or share distribution that
is furnished to the holders of each class or series of its shares
between the date of such reduction and the next such financial
statement, and in any event to all its shareholders within six months of
the date of such reduction.