Section 424 of The Companies Act No. 17 of 2015: General rule against limited company acquiring its own shares

    

(1) A limited company shall not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with this Part.
(2) Subsection (1) does not prevent a limited company from acquiring any of its own fully paid shares otherwise than for valuable consideration.
(3) Subsection (1) does not prohibit a company from—(a) acquiring shares in a reduction of capital duly made; or
(b) forfeiting shares, or accepting the surrender of shares, in accordance with a company's articles, for a failure to pay an amount payable for the shares.
(4) An acquisition in contravention of this section is void.
(5) If a company contravenes this section, the company, and each officer of the company who is in default, commit an offence.
(6) A company found guilty of an offence under subsection (5) is liable on conviction to a fine not exceeding one million shillings.
(7) An officer of a company who is found guilty of an offence under subsection
(5) is liable on conviction to a fine not exceeding five hundred thousand shillings.


Disclaimer: This document is not to be taken as legal advise.

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