Part 18Acquisition by limited company of its own shares

Chapter 5Redemption or purchase by private company out of capital

The permissible capital payment

710The permissible capital payment

(1)

The payment that may, in accordance with this Chapter, be made by a company out of capital in respect of the redemption or purchase of its own shares is such amount as, after applying for that purpose—

(a)

any available profits of the company, and

(b)

the proceeds of any fresh issue of shares made for the purposes of the redemption or purchase,

is required to meet the price of redemption or purchase.

(2)

That is referred to below in this Chapter as “the permissible capital payment” for the shares.