Section 440 of The Companies Act No. 17 of 2015: Meaning of “financial assistance” for purposes of this Part
(1) In this Division, “financial assistance” means—(a) financial assistance given in the form of a gift; (b) financial assistance given—
(i) in the form of a guarantee, security or indemnity other than an indemnity in respect of the indemnifier's own neglect or default; or
(ii) in the form of a release or waiver; (c) financial assistance given—
(i) in the form of a loan or any other agreement under which any of the obligations of the person giving the assistance are to be
fulfilled at a time when in accordance with the agreement any obligation of another party to the agreement remains unfulfilled; or
(ii) in the form of the novation of, or the assignment of rights arising under, a loan or such other agreement; or
(d) any other financial assistance given by a company if—
(i) the net assets of the company are reduced to a material extent by the giving of the assistance; or (ii) the company has no net assets.
(2) In this Part, “net assets” means the aggregate amount of the company’s assets of the company less the aggregate amount of its liabilities.
(3) In the case of a company that prepares an individual financial statement, the liabilities of the company include any provision that is made in that statement.
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- Section 442 - Assistance for acquisition of shares in public company
(1) If a person is acquiring or proposing to acquire shares in a public company, neither the company nor any other company that is a subsidiary of the company may give financial assistance (directly...
- Section 443 - Assistance by public company for acquisition of shares in its private holding company
(1) If a person is acquiring or proposing to acquire shares in a private company, a public company that is a subsidiary of that company shall not give financial assistance (directly or indirectly) for...
- Section 444 - Offence to give prohibited assistance
(1) If a company contravenes section 442(1) or (3) or 443 (1) or (3), thecompany, and each officer of the company who is in default, commit an offence.
(2) A company that is found guilty of an...
- Section 445 - Certain transactions excepted unconditionally from sections 442 and 443
Sections 442 and 443 do not prohibit any of the following transactions— (a) a distribution of a company’s assets in the form of—(i) a dividend lawfully made; or
(ii) a distribution in the course of a...
- Section 446 - Certain transactions excepted from sections 442 and 443 conditionally
(1) This section applies to the following transactions—
(a) if the lending of money is part of the ordinary business of the company —the lending of money in the ordinary course of the company’s...
- Section 447 - Power of limited company to purchase own shares
(1) A limited company having a share capital may purchase its own shares
(including any redeemable shares), subject to— (a) the following provisions of this Division; and
(b) any restriction or...
- Section 448 - Purchase of company’s own shares
(1) A limited company may not purchase its own shares unless they are fullypaid.
(2) A limited company that purchases its own shares shall pay for them on purchase.
(3) A purchase in contravention...
- Section 449 - Financing of purchase of company's own shares
(1) A private limited company may purchase its own shares out of capital in accordance with Division 4.
(2) Subject to subsection (1)—
(a) a limited company may purchase its own shares only out...
- Section 450 - Approval for company to purchase own shares
(1) A limited company may purchase its own shares only—
(a) by an off-market purchase, under a contract approved in advance in accordance with section 451; or
(b) by a market purchase, approved in...
- Section 451 - Authorisation for off-market purchase
(1) A company may make an off–market purchase of its own shares under acontract but only if—
(a) the terms of the contract have been approved by a special resolution of the company before the...
- Section 452 - Resolution authorising off-market purchase: exercise of voting rights
(1) This section applies to a resolution to confer, vary, revoke or renew an approval for the purposes of section 451.
(2) If the resolution is proposed as a written resolution, a member who holds...
- Section 453 - Resolution approving off-market purchase: disclosure of details of contract
(1) This section applies to a resolution passed by a company to confer, vary, revoke or renew an approval to make a purchase under section 451.
(2) The company shall ensure that a copy of the...
- Section 454 - Variation of contract for off-market purchase
(1) A company may agree to a variation of a contract approved under section451 only if the variation is approved in advance in accordance with this section.
(2) The terms of the variation have effect...
- Section 455 - Resolution approving variation: exercise of voting rights
(1) This section applies to a resolution passed by a company to confer, vary, revoke or renew an approval to vary a contract under section 454.
(2) If the resolution is proposed as a written...
- Section 456 - Resolution approving variation: disclosure of details of variation
(1) This section applies to a resolution passed by a company under section 454.
(2) The company shall ensure that a copy of the proposed variation (if it is inwriting) or a written memorandum giving...
- Section 457 - Release of company’s rights under contract for off-market purchase
(1) An agreement by a company to release its rights under a contract approvedunder section 451 is void unless the terms of the release agreement are approved in advance in accordance with this...
- Section 458 - Approval for company to make market purchase
(1) A company may make a market purchase of its own shares only if the purchase has been approved by a resolution of the company.
(2) Such an approval—
(a) can be general or limited to the purchase...
- Section 459 - Copy of contract or memorandum to be available for inspection
(1) This section applies to a company that has entered into—
(a) a contract approved under section 451; or
(b) a contract for a purchase approved under section 458.
(2) The company shall keep...
- Section 460 - Enforcement of right to inspect copy or memorandum
(1) If a company fails to comply with a requirement of section 459, the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not...
- Section 461 - Company’s right to purchase own shares not assignable
The rights of a company under a contract authorised under section 451 or 458 are not capable of being assigned.
- Section 462 - Payments apart from purchase price to be made out of distributable profits
(1) A payment made by a company in consideration of—
(a) acquiring any right with respect to the purchase of its own shares under a contingent purchase contract approved under section 451;
(b) the...
- Section 463 - How shares purchased are to be treated
If a limited company makes a purchase of its own shares in accordance with this Division, then—
(a) if section 458 applies, the shares are to be held and dealt with in accordance with Part XXI,...
- Section 464 - Return of purchase of own shares to be lodged with Registrar
(1) Within fourteen days after a company purchases shares under this Division, it shall lodge with the Registrar for registration a return that complies with subsections (2) to (4).
(2) The return...
- Section 465 - Notice to Registrar of cancellation of shares
(1) If, on the purchase by a company of any of its own shares in accordance with this Part—
(a) section 526 does not apply (so that the shares are treated as cancelled); or
(b) that section applies...
- Section 466 - Interpretation: Division 4
In this Division—
(a) a reference to payment out of capital is to any payment so made, whether or not it would, apart from this section, be treated as a payment out of capital; and
(b) "the...
- Section 467 - Power of private limited company to redeem or purchase own shares out of capital
A private limited company may in accordance with this Division, but subject to any restriction or prohibition in the company's articles, make a payment in respect of the redemption or purchase of its...
- Section 468 - The permissible capital payment
A payment that, in accordance with this Division, can be made by a company out of capital in respect of the redemption or purchase of its own shares is such amount as, after applying for that purpose—...
- Section 469 - What profits are available
(1) For the purposes of this Division, the available profits of the company, inrelation to the redemption or purchase of any of its shares, are the profits of the company that are available for...
- Section 470 - Determination of available profits
(1) The available profits of the company are determined as follows—
(a) first—
Determine the profits of the company by reference to the following items as stated in the relevant financial...
- Section 471 - Requirements for payment out of capital
(1) A payment out of capital by a private company for the redemption orpurchase of its own shares is not lawful unless the requirements of section 472, 474, 477 and 478 are satisfied.
(2) Subsection...
- Section 472 - Directors’ statement and auditor’s report
(1) The company’s directors shall make a statement that complies with subsection (2).
(2) A statement complies with this subsection only if it specifies the amount of the permissible capital payment...
- Section 473 - Directors’ statement: offence if no reasonable grounds for opinion
If the directors make a statement under sections 468 to 471 without having reasonable grounds for the opinion expressed in it, each of the directors who is in default commits an offence and on...
- Section 474 - Payment to be approved by special resolution
(1) A payment out of capital is invalid unless it is approved by a special resolution of the company that complies with this section.
(2) Such a resolution is void unless it is passed on; or within...
- Section 475 - Resolution authorising payment: exercise of voting rights
(1) This section applies to a resolution passed by a company under section 474.
(2) If the resolution is proposed as a written resolution, a member who holds shares to which the resolution relates is...
- Section 476 - Resolution authorising payment: disclosure of directors’ statement and auditor’s report
(1) This section applies to a resolution passed by a company under section 474.
(2) The company shall ensure that a copy of the directors' statement andauditor's report under section 482 are made...
- Section 477 - Public notice of proposed payment
(1) Within the seven days immediately after the date of the resolution undersection 474, the company shall cause to be published in the Gazette a notice—
(a) stating that the company has approved a...
- Section 478 - Company to make directors’ statement and auditor’s report to be available for inspection
(1) A company that passes a resolution in accordance with section 475 shall ensure that the directors’ statement and auditor’s report required by section 472 are kept available for inspection...
- Section 479 - Objection to payment by members or creditors: application to the Court to cancel resolution
(1) If a private company passes a special resolution approving a payment out of capital for the redemption or purchase of any of its shares—
(a) any member of the company (other than one who...
- Section 480 - Notice of Court application or order to be lodged with Registrar
(1) Within fourteen days after making an application under section 479, the applicant shall lodge with the Registrar for registration a notice of the application.
(2) Subsection (1) does not affect...
- Section 481 - When payment out of capital to be made
(1) A payment out of capital is invalid unless it is made—
(a) no earlier than five weeks after the date on which the resolution under section 475 is passed; and
(b) no later than seven weeks after...
- Section 482 - Company whose shares are redeemed or purchased to transfer amount to capital redemption reserve
(1) In this section, “capital redemption reserve”, in relation to a company, means the reserve referred to in subsection (2).
(2) If under this Part or Part XX, shares of a limited company are...
- Section 483 - Accounting consequences of payment out of capital
(1) This section applies if a payment out of capital is made in accordance with Division 4.
(2) If the permissible capital payment is less than the nominal amount of the shares redeemed or purchased,...
- Section 484 - Effect of company’s failure to redeem or purchase
(1) This section applies to a company that—
(a) issues shares on terms that they are or are liable to be redeemed; or (b) agrees to purchase any of its shares.
(2) A company to which this section...
- Section 485 - Interpretation: Part XVII
(1) In this Part, “distribution” means every description of distribution of the assets of a company to its members (whether in cash or otherwise) subject to the exceptions in subsection (2).
(2) The...
- Section 486 - Distributions to be made only out of profits available for the purpose
(1) A company may make a distribution only out of profits available for thepurpose.
(2) The profits of a company available for distribution are—
(a) its accumulated, realised profits (so far as not...
- Section 487 - Net asset restriction on distributions by public companies
(1) A public company may make a distribution only—
(a) if the amount of its net assets is not less than the aggregate of its called-up share capital and undistributable reserves; and
(b) if, and to...
- Section 488 - Justification of distribution by reference to relevant financial statements
(1) Whether a distribution may be made by a company without contravening this Part is determined by reference to the following items as stated in the relevant financial statements—
(a) profits,...
- Section 489 - Successive distribution etc by reference to the same financial statements
(1) In determining whether a proposed distribution may be made by a company in a case in which—
(a) one or more previous distributions have been made in pursuance of a determination made by reference...
- Section 490 - Treatment of development costs
(1) If development costs are shown or included as an asset in a company’saccounting records, any amount shown or included in respect of those costs is to be treated for the purposes of section 486 as...
- Section 491 - Determination of profit or loss in respect of asset where records incomplete
In determining for the purposes of this Part whether a company has made a profit or loss in respect of an asset when—
(a) there is no record of the original cost of the asset; or
(b) a record cannot...