Companies Ordinance Cap 32

Section Num: 79J     Version Date 30/06/1997

Method of applying section 79F to successive distributions

(1) For the purpose of determining by reference to particular accounts whether a proposed distribution may be made by a company, section 79F has effect, in a case where one or more distributions have already been made in pursuance of determinations made by reference to those same accounts, as if the amount of the proposed distribution was increased by the amount of the distributions so made.

(2) Subsection (1) applies (if it would not otherwise do so) to-

(a) financial assistance lawfully given by a listed company out of its distributable profits in a case where the assistance is required to be so given by section 47D;

(b) financial assistance lawfully given by an unlisted company out of its distributable profits in a case where the assistance is required to be so given by section 47E(2);

(c) financial assistance given by a company in contravention of section 47A, in a case where the giving of that assistance reduces the company's net assets or increases its net liabilities;

(d) a payment made by a company in respect of the purchase by it of shares in the company (except a payment lawfully made otherwise than out of distributable profits); and

(e) a payment of any description specified in section 49F (company's purchase of right to acquire its own shares, etc.), being financial assistance given or payment made since the relevant accounts were prepared, as if any such financial assistance or payment were a distribution already made in pursuance of a determination made by reference to those accounts.

(3) In this section-

"financial assistance" (¸ê§U) has the same meaning as in sections 47A to 48;  <* Note - Exp. X-Ref.: Sections 47A, 47B, 47C, 47D, 47E, 47F, 47G, 48 *>

"net liabilities", in relation to the giving of financial assistance by a company, means the amount by which the aggregate amount of the company's liabilities (within the meaning of section 47D(2)(b)) exceeds the aggregate amount of its assets, taking the amount of the assets and liabilities to be as stated in the company's books of account immediately before the financial assistance is given.

[cf. 1985 c. 6 s. 274 U.K.]

(Part IIA added 77 of 1991 s. 6)