Part 23 Distributions (ss 829-853)
Part 23 Distributions (ss 829-853)
Companies Act 2006 | Legislation

829 Meaning of “distribution”

(1)     In this Part “distribution” means every description of distribution of a company's assets to its members, whether in cash or otherwise, subject to the following exceptions.

(2)     The following are not distributions for the purposes of this Part—

(a)     an issue of shares as fully or partly paid bonus shares;

(b)     the reduction of share capital—

(i)     by extinguishing or reducing the liability of any of the members on any of the company's shares in respect of share capital not paid up, or

(ii)     by repaying paid-up share capital;

(c)     the redemption or purchase of any of the company's own shares out of capital (including the proceeds of any fresh issue of shares) or out of unrealised profits in accordance with Chapter 3, 4 or 5 of Part 18;

(d)     a distribution of assets to members of the company on its winding up.


830 Distributions to be made only out of profits available for the purpose

(1)     A company may only make a distribution out of profits available for the purpose.

(2)     A company's profits available for distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made.

(3)     Subsection (2) has effect subject to sections 832[, 833A] and 835 (investment companies [and Solvency 2 insurance companies].


831 Net asset restriction on distributions by public companies

(1)     A public company may only make a distribution—

(a)     if the amount of its net assets is not less than the aggregate of its called-up share capital and undistributable reserves, and

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