financial assistance

financial assistance
index consideration (recompense)

Burton's Legal Thesaurus. . 2006


financial assistance
The use of a company's own resources to provide financial assistance to enable others to buy its shares is generally prohibited and carries criminal penalties. The restriction is interpreted broadly and extreme care is needed to avoid the prohibited activities. Procedures and exemptions which permit financial assistance in limited conditions are set out in Chapter VI of Part V of the Companies Act 1985. Professional advice should be sought.

Easyform Glossary of Law Terms. — UK law terms.


financial assistance
Rules, contained in the Companies Act 1985, prohibiting companies from giving financial assistance for the purchase of their shares. Financial assistance is prohibited where it is given by an English company whose shares are being, or have been, acquired (or for any of that company's subsidiaries) for the purpose of that acquisition, unless certain exceptions apply (section 151(1)). The prohibition is extended to cover any financial assistance given to reduce or discharge any liability incurred by the company or any third party for the purpose of the acquisition. A private company may give financial assistance if it follows the whitewash procedure.
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financial assistance

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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