Part 18

Acquisition by limited company of its own shares
Chapter 4

Purchase of own shares

Supplementary provisions

Payments apart from purchase price to be made out of distributable profits
705
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.
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2
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))