Part 23Distributions
Chapter 3Supplementary provisions
Consequences of unlawful distribution
847Consequences of unlawful distribution
1
This section applies where a distribution, or part of one, made by a company to one of its members is made in contravention of this Part.
2
If at the time of the distribution the member knows or has reasonable grounds for believing that it is so made, he is liable—
a
to repay it (or that part of it, as the case may be) to the company, or
b
in the case of a distribution made otherwise than in cash, to pay the company a sum equal to the value of the distribution (or part) at that time.
3
This is without prejudice to any obligation imposed apart from this section on a member of a company to repay a distribution unlawfully made to him.
4
This section does not apply in relation to—
a
financial assistance given by a company in contravention of section 678 or 679, or
b
any payment made by a company in respect of the redemption or purchase by the company of shares in itself.