Section 654 Treatment of reserve arising from reduction of capitalI1

(1)

A reserve arising from the reduction of a company's share capital is not distributable, subject to any provision made by order under this section.

(2)

The Secretary of State may by order specify cases in which—

(a)

the prohibition in subsection (1) does not apply, and

(b)

the reserve is to be treated for the purposes of Part 23 (distributions) as a realised profit.

(3)

An order under this section is subject to affirmative resolution procedure.

Annotations

I1: S. 654 wholly in force at 1.10.2008; s. 654 not in force at Royal Assent see s. 1300; s. 654 in force for specified purposes at 20.1.2007 by S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); s. 654 in force at 1.10.2008 in so far as not already in force by S.I. 2008/1886, art. 2 (with arts. 6, 7)

C1: Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))
C2: Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2