C2C1Part 18Acquisition by limited company of its own shares

Annotations:
Modifications etc. (not altering text)
C2

Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))

Chapter 4Purchase of own shares

Supplementary provisions

705Payments apart from purchase price to be made out of distributable profits

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.