Financial Assistance Notes

Financial assistance 1) Has there been an acquisition of shares? 1) Applies to a share sale 2) Applies to a share issue 2) Is this a company to which the prohibition applies? 1) The target company is a public company s.678(1) and (3) CA 2006 a) The prohibition applies to the target public company itself; and b) Any subsidiary of the target company, whether private or public 2) The target company is a private company s.679(1) and (3) 3) Is the target or its subsidiary giving direct or indirect financial assistance? 1) Financial assistance by way of gift (direct) - s.677(1)(a) 2) Financial assistance by way of guarantee, security, indemnity, release or waiver (indirect) - s.677(1)(b) 3) Financial assistance by way of loan or similar agreement (direct) - s.677(1)(c) 4) Any other financial assistance where the net assets of the company are reduced by a material extent by giving financial assistance - s.677(1)(d) 4) When is the financial assistance given? 1) Before or at the same time as the acquisition for the purpose of the acquisition - s.678(1) and s.679(1) 2) After the acquisition, for the purpose of releasing or discharging a liability incurred for the acquisition - s.678(3) and s.679(3) a) The prohibition only applies to any public subsidiary of the target company 

Buy the full version of these notes or essay plans and more in our Business Law and Practice Notes.