Show Summary Details
Mayson, French & Ryan on Company Law

Mayson, French & Ryan on Company Law (36th edn)

Derek French
Page of

Printed from Oxford Law Trove. Under the terms of the licence agreement, an individual user may print out a single article for personal use (for details see Privacy Policy and Legal Notice).

date: 10 December 2022

p. 25210. Distributions and maintenance of capitallocked

p. 25210. Distributions and maintenance of capitallocked

  • Derek FrenchDerek FrenchFreelance editor and writer in business and legal publishing for over 30 years


This chapter examines the controls imposed on return of a company’s capital to its members, first by considering the common law general principle that return of capital to shareholders is illegal unless permitted by statute. It then discusses the problem of how to distinguish between a legal distribution of profits and an illegal return of capital; transfer of profits to a capital redemption reserve and use of profits to pay up bonus shares; company’s issuance and redemption of redeemable shares or purchase of its own shares; purchased shares as treasury shares; and how a company may reduce its issued share capital by special resolution. The chapter also looks at capitalisations and employees’ share schemes. It includes analysis of three court cases that are particularly significant to distributions and the maintenance of capital.

You do not currently have access to this chapter

Sign in

Please sign in to access the full content.


Access to the full content requires a subscription