Financial assistance for purchase of own shares, Business Law and Ethics

Financial Assistance For Purchase Of Own Shares:

i) Financial Assistance For Purchase Of Own Shares

S.56 (1) of the Act renders it unlawful for a company to give there where directly or indirectly and whether by means of a loan plus guarantee plus the provision of security or else or may any financial assistance used for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company, or whether the company is a subsidiary company then in its holding company. The consequences of a contravention of the section are:

a) The contract for the financial assistance is void and illegal, and cannot be enforced against a party thereto: Standard Bank v Mehotoro Farm (50);

b) The company and every officer of the company who is in default shall be liable to a fine not exceeding twenty thousand shillings;

c) Every director who is a party to the contravention is guilty of a breach of trust and is liable to recoup any losses which the company suffers as a result: Wallersteiner v Moir (51).

Posted Date: 1/12/2013 4:20:06 AM | Location : United States

Related Discussions:- Financial assistance for purchase of own shares, Assignment Help, Ask Question on Financial assistance for purchase of own shares, Get Answer, Expert's Help, Financial assistance for purchase of own shares Discussions

Write discussion on Financial assistance for purchase of own shares
Your posts are moderated
Related Questions
Articles of Partnership - Authority of Partners The relations of partners to one other are governed through the Articles of Partnership.  Like third parties are not allowed fo

Characteristics of Unincorporated Associations However these are associations of persons that who associate to promote a common and lawful purpose.  Thus now they have no lega

List of Members: S.130(6) provides that the directors shall cause a list showing the names and postal addresses of the members of the company, and the number of shares held th

Indicators of phoenix activity Stakeholders noted that there are a range of 'signals' or 'indicators' that phoenix activity may be about to occur. These generally occur before t

Trade Unions:                   Trade Unions are registered under s.11 of the Trade Unions Act 1952 with the primary object of regulating the  relations between employees and

QUESTION 1 Explain the meaning of ‘constructive dismissal' with reference to appropriate case law QUESTION 2 (a) What is the meaning of remuneration? (b) What type o

Explain Self determination Self determination is actually the foundation of United Nations (UN) Charter. It is defined as a right of people to determine and to choose their ow

Payee - Negotiable Instruments Some the payee like: (i) Section 7(1) gives such where a bill is not payable for the bearer, such the payee must be named otherwise indicated

Question 1 Describe the term banking. What are the acceptable businesses for a banking company as per BR Act 1949 Question 2 When is a negotiable apparatus considered as dish

Directors liability: This was fraudulent preference and the bank must repay the sums received. The directors' liability under their guarantee to the bank then revived. A paym