Point in time view as at 06/04/2018.
Companies Act 2006, Section 705 is up to date with all changes known to be in force on or before 02 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
(1)A payment made by a company in consideration of—
(a)acquiring any right with respect to the purchase of its own shares in pursuance of a contingent purchase contract approved under section 694 (authorisation of off-market purchase),
(b)the variation of any contract approved under that section, or
(c)the release of any of the company's obligations with respect to the purchase of any of its own shares under a contract—
(i)approved under section 694, or
(ii)authorised under section 701 (authorisation of market purchase),
must be made out of the company's distributable profits.
(2)If this requirement is not met in relation to a contract, then—
(a)in a case within subsection (1)(a), no purchase by the company of its own shares in pursuance of that contract may be made under this Chapter;
(b)in a case within subsection (1)(b), no such purchase following the variation may be made under this Chapter;
(c)in a case within subsection (1)(c), the purported release is void.
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