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(1)In this Part “distribution” means every description of distribution of a company's assets to its members, whether in cash or otherwise, subject to the following exceptions.
(2)The following are not distributions for the purposes of this Part—
(a)an issue of shares as fully or partly paid bonus shares;
(b)the reduction of share capital—
(i)by extinguishing or reducing the liability of any of the members on any of the company's shares in respect of share capital not paid up, or
(ii)by repaying paid-up share capital;
(c)the redemption or purchase of any of the company's own shares out of capital (including the proceeds of any fresh issue of shares) or out of unrealised profits in accordance with Chapter 3, 4 or 5 of Part 18;
(d)a distribution of assets to members of the company on its winding up.
Commencement Information
I1S. 829 wholly in force at 6.4.2008; s. 829 not in force at Royal Assent see s. 1300; s. 829 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)
(1)A company may only make a distribution out of profits available for the purpose.
(2)A company's profits available for distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made.
(3)Subsection (2) has effect subject to sections 832 and 835 (investment companies etc: distributions out of accumulated revenue profits).
Commencement Information
I2S. 830 wholly in force at 6.4.2008; s. 830 not in force at Royal Assent see s. 1300; s. 830 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)
(1)A public company may only make a distribution—
(a)if the amount of its net assets is not less than the aggregate of its called-up share capital and undistributable reserves, and
(b)if, and to the extent that, the distribution does not reduce the amount of those assets to less than that aggregate.
(2)For this purpose a company's “net assets” means the aggregate of the company's assets less the aggregate of its liabilities.
(3)“Liabilities” here includes—
(a)where the relevant accounts are Companies Act accounts, provisions of a kind specified for the purposes of this subsection by regulations under section 396;
(b)where the relevant accounts are IAS accounts, provisions of any kind.
(4)A company's undistributable reserves are—
(a)its share premium account;
(b)its capital redemption reserve;
(c)the amount by which its accumulated, unrealised profits (so far as not previously utilised by capitalisation) exceed its accumulated, unrealised losses (so far as not previously written off in a reduction or reorganisation of capital duly made);
(d)any other reserve that the company is prohibited from distributing—
(i)by any enactment (other than one contained in this Part), or
(ii)by its articles.
The reference in paragraph (c) to capitalisation does not include a transfer of profits of the company to its capital redemption reserve.
(5)A public company must not include any uncalled share capital as an asset in any accounts relevant for purposes of this section.
(6)Subsection (1) has effect subject to sections 832 and 835 (investment companies etc: distributions out of accumulated revenue profits).
Commencement Information
I3S. 831 wholly in force at 6.4.2008; s. 831 not in force at Royal Assent see s. 1300; s. 831 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)
(1)An investment company may make a distribution out of its accumulated, realised revenue profits if the following conditions are met.
(2)It may make such a distribution only if, and to the extent that, its accumulated, realised revenue profits, so far as not previously utilised by a distribution or capitalisation, exceed its accumulated revenue losses (whether realised or unrealised), so far as not previously written off in a reduction or reorganisation of capital duly made.
(3)It may make such a distribution only—
(a)if the amount of its assets is at least equal to one and a half times the aggregate of its liabilities to creditors, and
(b)if, and to the extent that, the distribution does not reduce that amount to less than one and a half times that aggregate.
(4)For this purpose a company's liabilities to creditors include—
(a)in the case of Companies Act accounts, provisions of a kind specified for the purposes of this subsection by regulations under section 396;
(b)in the case of IAS accounts, provisions for liabilities to creditors.
(5)The following conditions must also be met—
[F1(a)the company's shares must be shares admitted to trading on a regulated market;]
(b)during the relevant period it must not have—
(i)F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ii)applied any unrealised profits F3. . . in paying up debentures or amounts unpaid on its issued shares;
(c)it must have given notice to the registrar under section 833(1) (notice of intention to carry on business as an investment company)—
(i)before the beginning of the relevant period, or
(ii)as soon as reasonably practicable after the date of its incorporation.
(6)For the purposes of this section—
(a)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)the “relevant period” is the period beginning with—
(i)the first day of the accounting reference period immediately preceding that in which the proposed distribution is to be made, or
(ii)where the distribution is to be made in the company's first accounting reference period, the first day of that period,
and ending with the date of the distribution.
(7)The company must not include any uncalled share capital as an asset in any accounts relevant for purposes of this section.
Textual Amendments
F1S. 832(5)(a) substituted (6.4.2012) by The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(2)(a)
F2S. 832(5)(b)(i) and following word omitted (6.4.2012) by virtue of The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(2)(b)
F3Words in s. 832(5)(b)(ii) omitted (6.4.2012) by virtue of The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(2)(c)
F4S. 832(6)(a) and following word omitted (6.4.2012) by virtue of The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(3)
Commencement Information
I4S. 832 wholly in force at 6.4.2008; s. 832 not in force at Royal Assent see s. 1300; s. 832 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)
(1)In this Part an “investment company” means a public company that—
(a)has given notice (which has not been revoked) to the registrar of its intention to carry on business as an investment company, and
(b)since the date of that notice has complied with the following [F5requirement].
(2)[F6The requirement is]—
(a)that the business of the company consists of investing its funds [F7in shares, land or other assets], with the aim of spreading investment risk and giving members of the company the benefit of the results of the management of its funds;
(b)F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d)F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)Notice to the registrar under this section may be revoked at any time by the company on giving notice to the registrar that it no longer wishes to be an investment company within the meaning of this section.
(5)On giving such a notice, the company ceases to be such a company.
Textual Amendments
F5Word in s. 833(1)(b) substituted (6.4.2012) by The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(4)
F6Words in s. 833(2) substituted (6.4.2012) by The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(5)(a)
F7Words in s. 833(2)(a) substituted (6.4.2012) by The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(5)(b)
F8S. 833(2)(b)(c)(d) omitted (6.4.2012) by virtue of The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(5)(c) (with reg. 3)
F9S. 833(3) omitted (6.4.2012) by virtue of The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(6)
Commencement Information
I5S. 833 wholly in force at 6.4.2008; s. 833 not in force at Royal Assent see s. 1300; s. 833 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)
F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F10S. 834 omitted (6.4.2012) by virtue of The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(7)
F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F11S. 835 omitted (6.4.2012) by virtue of The Companies Act 2006 (Amendment of Part 23) (Investment Companies) Regulations 2012 (S.I. 2012/952), regs. 1, 2(7)
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