Companies Ordinance Cap 32

Section Num: 79A      Version Date 13/02/2004

Interpretation

PART IIA

DISTRIBUTION OF PROFITS AND ASSETS

(1) In this Part-

"appointed day" means the date of commencement* of this Part under the Companies (Amendment) Ordinance 1991 (77 of 1991);

"called up share capital", in relation to a company, means so much of its share capital as equals the aggregate amount of the calls made on its shares (whether or not those calls have been paid), together with any share capital paid up without being called and any share capital to be paid on a specified future date under the articles, the terms of allotment of the relevant shares or any other arrangements for payment of those shares and "uncalled share capital" is to be construed accordingly;

"capitalisation", in relation to a company's profits, means any of the following operations (whenever carried out)-

(a) applying the profits in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid bonus shares; or

(b) transferring the profits to capital redemption reserve;

"distribution" means every description of distribution of a company's assets to its members, whether in cash or otherwise, except distribution by way of-

(a) an issue of shares as fully or partly paid bonus shares;

(b) the redemption or purchase of any of the company's own shares out of capital (including the proceeds of any fresh issue of shares) or out of unrealised profits in accordance with sections 49 to 49S;  <* Note - Exp. X-Ref.: Sections 49, 49A, 49B, 49BA, 49C, 49D, 49E, 49F, 49G, 49H, 49I, 49J, 49K, 49L, 49M, 49N, 49O, 49P, 49Q, 49R, 49S *>

(c) the reduction of share capital by extinguishing or reducing the liability of any of the members on any of the company's shares in respect of share capital not paid up, or by paying off paid up share capital; and

(d) a distribution of assets to members of the company on its winding up;

"net assets" (²b¸ê²£), in relation to a company, has the same meaning as in section 157HA(15).  (Amended 28 of 2003 s. 33)

(2) References to profits and losses of any description are (respectively) to profits and losses of that description made at any time.

(3) Without prejudice to-

(a) the construction of any other expression (where appropriate) by reference to accepted accounting principles or practice; or

(b) any specific provision for the treatment of profits of any description as realised, it is declared that references in this Part to realised profits, in relation to a company's accounts, are to such profits of the company as fall to be treated as realised profits for the purposes of those accounts in accordance with principles generally accepted with respect to the determination for accounting purposes of realised profits at the time when those accounts are prepared.

[cf. 1985 c. 6 ss. 263, 264 & 280 U.K.]

(Part IIA added 77 of 1991 s. 6)

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Note:

* Commencement date: 1 September 1991.