Companies Act, 1990
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Incidental payments with respect to purchase of own shares. |
218.—(1) Any 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 authorised under section 214 , or | ||
(b) the variation of a contract authorised under section 213 or 214 , 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 authorised under section 213 , 214 or 215 | ||
shall be unlawful if any such payment is made otherwise than out of distributable profits of the company. | ||
(2) If the requirements of subsection (1) are not satisfied in relation to a contract— | ||
(a) in a case to which paragraph (a) of that subsection applies, no purchase by the company of its own shares in pursuance of that contract shall be lawful under this Part; | ||
(b) in a case to which paragraph (b) of that subsection applies, no such purchase following the variation shall be lawful under this Part; and | ||
(c) in a case to which paragraph (c) of that subsection applies, the purported release shall be void. |