SheriaPlex
Cart Try Legal AI
The Companies Act No. 17 of 2015

Section 488 of The Companies Act No. 17 of 2015: Justification of distribution by reference to relevant financial statements

✧ Explain this provision with AI ↗Legal document templates →
(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, losses, assets and liabilities;
(b) provisions of a kind specified for the purposes of this section by the regulations;
(c) share capital and reserves (including undistributable reserves).
(2) The relevant financial statements are the company's last annual financial statements, except that—
(a) if the distribution would be found to contravene this Part by reference to the company’s last annual financial statements, it may be justified by reference to interim financial statements; and
(b) if the distribution is proposed to be declared during the company's first accounting reference period, or before any financial statements have been circulated in respect of that period, it may be justified by reference to initial financial statements.
(3) The company shall ensure that the requirements of the Fifth Schedule are complied with as and if applicable.
(4) If the company fails to comply with any applicable requirement of the Fifth Schedule, the relevant financial statements may not be relied on for the purposes of this Part and the distribution is accordingly treated as contravening this Part.

Check the current authoritative text and amendment history before relying on this provision.

View all provisions of The Companies Act No. 17 of 2015 →

More provisions

View all →

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 498 — Procedure on transfer being lodged

(1) As soon as practicable (and in any case not later than two months) after the date on which a transfer of a company’s shares or debentures is lodged with it, the company shall either— (a) register…

Section 501 — Evidence of grant of probate, etc

(1) If a document produced to a company is by law sufficient evidence of thegrant of— (a) probate of the will of a deceased person; (b) letters of administration, of the estate of a deceased person; o…

Section 509 — Duty to consult

Regulations purporting to be made under sections 506 or 507, and an order purporting to be made under section 508, are invalid unless the Cabinet Secretary has previously carried out such consultation…

Section 510 — Interpretation: Part XIX

(1) For the purposes of this Part, an offer to the public includes an offer to any section of the public, however selected. (2) An offer is not regarded as an offer to the public if it can properly be…

Section 518 — The authorised minimum

For the purposes of sections 516 and 517, the authorised minimum in relation to the nominal value of a public listed company's allotted share capital is six million seven hundred and fifty thousand sh…

Section 521 — Terms and manner of redemption

(1) The directors of a limited company may determine the terms, conditions and manner of redemption of shares if they are authorised to do so— (a) by the company's articles; or (b) by a resolution of…

Section 522 — Payment for redeemable shares

(1) Redeemable shares of a limited company can be redeemed only if theyare fully paid. (2) The terms of redemption of shares in a limited company may provide that the amount payable on redemption can,…

Section 523 — Financing of redemption

(1) Redeemable shares of a limited company can be redeemed only out of—(a) distributable profits of the company; or (b) the proceeds of a fresh issue of shares made for the purposes of the redemption.…

Section 525 — Notice to Registrar of redemption

(1) Within one month after a company has redeemed any redeemable shares, the company shall lodge with the Registrar for registration a notice specifying the shares that have been redeemed. (2) The com…

Section 526 — Treasury shares

(1) This section applies to a purchase or acquisition of shares by a limited company of its own shares in accordance with this Act and— (a) the purchase or acquisition is made out of distributable pro…

Section 527 — Treasury shares: maximum holdings

(1) If a company has shares of only one class, the company shall ensure that the aggregate nominal value of shares held as treasury shares does not at any time exceed ten per cent of the nominal value…

Section 529 — Disposal of treasury shares

(1) A company that holds shares as treasury shares may, at any time— (a) sell the shares, or any of them, for a cash consideration; or (b) transfer the shares, or any of them, for the purposes of or i…

Section 530 — Treasury shares: notice of disposal

(1) Within one month after shares held by a company as treasury shares—(a) are sold; or (b) are transferred for the purposes of an employees' share scheme, the company shall lodge with the Registrar f…

Section 531 — Cancellation of treasury shares

(1) A company that holds shares may at any time cancel all or any of the shares. (2) As soon as shares held by a company as treasury shares cease to bequalifying shares, the company shall cancel them.…

Section 534 — Treasury shares: offences

(1) If a company that holds or held shares as treasury shares fails to complywith a requirement of this Part, the company, and each officer of the company who is in default, commit an offence and on c…

Section 535 — Application of Part XXII

(1) This Part applies only to public companies. (2) This Part applies to the issued shares of a public company, or the issuedshares of a class shares of a public company, that confer rights to vote in…