PART VISHARE CAPITAL, ITS INCREASE, MAINTENANCE AND REDUCTION

CHAPTER VIIREDEEMABLE SHARES; PURCHASE BY A COMPANY OF ITS OWN SHARES

Redemption and purchase generally

Payments apart from purchase price to be made out of distributable profits178 F2

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 contract approved under Article 175, or

b

the variation of a contract approved under Article 174 or 175, 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 approved under Article 174 or 175 or under a contract for a purchase authorised under Article 176,

must be made out of the company's distributable profits.

2

If the requirements of paragraph (1) are not satisfied in relation to a contract—

a

in a case within paragraph (1)(a), no purchase by the company of its own shares in pursuance of that contract is lawful under this Chapter,

b

in a case within paragraph (1)(b), no such purchase following the variation is lawful under this Chapter, and

c

in a case within paragraph (1)(c), the purported release is void.