645. Payments apart from purchase price to be made out of distributable profits
Past version: effective from 14/06/2015 - 13/06/2015
To view other versions open the versions tab on the right
(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 634 (authority for 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 634 (authority for off-market purchase), or
(ii) authorised under section 641 (authority for 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 645(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 645(1)(b), no such purchase following the variation may be made under this Chapter,
(c) in a case within subsection 645(1)(c), the purported release is void.