Section 168 Payments apart from purchase price to be made out of distributable profits.

England, Wales and Scotland

(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 contract approved under section 165, or

(b)

the variation of a contract approved under section 164 or 165, 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 approved under section 164 or 165 or under a contract for a purchase authorised under section 166,

must be made out of the company’s distributable profits.

(2)

If the requirements of subsection (1) are not satisfied in relation to a contract—

(a)

in a case within paragraph (a) of the subsection, no purchase by the company of its own shares in pursuance of that contract is lawful under this Chapter,

(b)

in a case within paragraph (b), no such purchase following the variation is lawful under this Chapter, and

(c)

in a case within paragraph (c), the purported release is void.

Notes on Chapter VII

Textual amendments

F1: Ss. 126-182 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))