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Companies Act 2006

Section 851: Application of rules of law restricting distributions

1158.This section is a new provision which preserves the existing common law rules on unlawful distributions (see subsection (1)) – which continue to be an essential component in determining what amounts to an unlawful distribution.

1159.Subsection (2) makes an exception to this: in particular, it provides that the lawfulness and amount of distributions in kind are established by the statutory rules in sections 845 and 846 and not by any applicable common law rules.

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