Commentary

Section 157 Prohibition on target company giving financial assistance—Section 678

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

Section 157 Prohibition on target company giving financial assistance—Section 678

| Commentary

157 Prohibition on target company giving financial assistance—Section 678

Section 678 of the Companies Act 2006 prohibits the giving by a public company, or any of its subsidiaries, of financial assistance for the purpose of the acquisition of its own shares whether before or at the same time as the acquisition1. Furthermore, where a person has acquired shares in a company and any liability has been incurred (by that or any other person) for the purpose of that acquisition, it is not lawful for that company or any of its subsidiaries to give financial assistance directly or indirectly for the

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