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Section 462 of The Companies Act No. 17 of 2015: 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 variation of any contract approved under that section; 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 451 or 458,
may be made only out of the company’s distributable profits. (2) If subsection (1) is contravened, the following provisions apply—
(a) in a case within subsection (1)(a), a purchase by the company of its own shares under that contract cannot be made under this Division;
(b) in a case within subsection (1)(b), such a purchase following the variation cannot be made under this Division; and
(c) in a case within subsection (1)(c), purported release is void.

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

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