Q&As

Can an intra-group transfer of an asset between a company (the transferor) and a sister company of the transferor’s parent (the transferee) be a distribution under Part 23 of the Companies Act 2006, where both the transferor and the transferee have the same ultimate parent company?

read titleRead full title

Published by a ½Û×ÓÊÓƵ Corporate expert
Published on: 25 April 2017

We are not aware of any direct Authority confirming that an intra-group transfer of an asset between a company (the transferor) and a sister company of the transferor’s parent (the transferee) is (or is not) a distribution falling within the Rules governing the making of lawful distributions by a company in Part 23 of the Companies Act 2006 (CA 2006), where both the transferee and the transferor have the same ultimate parent company. Therefore, there is a possibility that a court could view such a transaction as a distribution for these purposes.

Definition of distribution

CA 2006, s 829 defines ‘distribution’ for the purposes of CA 2006, Pt 23 as every description of distribution of a company's assets to its members, whether in cash or otherwise, subject to the four specific exceptions. These exceptions do not include the

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Authority definition
What does Authority mean?

The public sector body procuring the project. This might, for example, be a local authority, an NHS trust, a central Government Department or a Non-Departmental Public Body.

Read more readmore

Popular documents

If a company acquires its own shares for no consideration, can it exercise the rights attaching to those

If a company acquires its own shares for no consideration, can it exercise the rights attaching to those shares?Section 658 of the Companies Act 2006 (CA 2006) specifies that a limited company must not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with

Can a share certificate be executed by electronic means?

Can a share certificate be executed by electronic means?This Q&A relates to certificated shares (ie not shares traded via the CREST system). It assumes no overseas legal (or cross-border) considerations arise.There is nothing that prohibits a share certificate being executed electronically (ie

Is there any difference between a dividend in specie and a distribution in specie?

Is there any difference between a dividend in specie and a distribution in specie?‘Distribution’ is given a very wide definition for the purpose of Part 23 of the Companies Act 2006 (CA 2006).It is every description of distribution of a company’s assets to its members, whether in cash or

Is it possible for bonus shares to be allotted and issued at a premium?

Is it possible for bonus shares to be allotted and issued at a premium?A bonus issue of shares is the allotment and issue by a company of shares to its existing shareholders, usually on the basis that they are fully paid at the time of issue, without any payment being required by shareholders for