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Companies Act 2006

Changes over time for: Cross Heading: Consequences of unlawful distribution

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Consequences of unlawful distributionU.K.

847Consequences of unlawful distributionU.K.

(1)This section applies where a distribution, or part of one, made by a company to one of its members is made in contravention of this Part.

(2)If at the time of the distribution the member knows or has reasonable grounds for believing that it is so made, he is liable—

(a)to repay it (or that part of it, as the case may be) to the company, or

(b)in the case of a distribution made otherwise than in cash, to pay the company a sum equal to the value of the distribution (or part) at that time.

(3)This is without prejudice to any obligation imposed apart from this section on a member of a company to repay a distribution unlawfully made to him.

(4)This section does not apply in relation to—

(a)financial assistance given by a company in contravention of section 678 or 679, or

(b)any payment made by a company in respect of the redemption or purchase by the company of shares in itself.

Commencement Information

I1S. 847 wholly in force at 6.4.2008; s. 847 not in force at Royal Assent see s. 1300; s. 847 in force at 6.4.2008 by S.I. 2007/3495, art. 3(1)(k) (with savings in arts. 7, 12 and subject to transitional adaptations in Sch. 1 paras. 14-20 and with savings in Sch. 4 paras. 33-35)

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