Companies (Amendment) Act, 1983
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PART IV Restrictions on distribution of profits and assets. | ||
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Profits available for distribution. |
45.—(1) A company shall not make a distribution (as defined by section 51 ) except out of profits available for the purpose. | |
(2) For the purposes of this Part, but subject to section 47 (1), a company's profits available for distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made. | ||
(3) A company shall not apply an unrealised profit in paying up debentures or any amounts unpaid on any of its issued shares. | ||
(4) For the purposes of subsections (2) and (3) any provision (within the meaning of the Sixth Schedule to the Principal Act) other than one in respect of any diminution in value of a fixed asset appearing ona revaluation of all the fixed assets or of all the fixed assets other than goodwill of the company, shall be treated as a realised loss. | ||
(5) Subject to section 49 (8), any consideration by the directors of a company of the value at any particular time of any fixed asset of the company shall be treated as a revaluation of that asset for the purposes of determining whether any such revaluation of the company's fixed assets as is required for the purposes of the exception from subsection (4) has taken place at that time; but where any such assets which have not actually been revalued are treated as revalued for those purposes by virtue of this subsection that exception shall only apply if the directors are satisfied that their aggregate value at the time in question is not less than the aggregate amount at which they are for the time being stated in the company's accounts. | ||
(6) If, on the revaluation of a fixed asset, an unrealised profit is shown to have been made and, on or after the revaluation, a sum is written off or retained for depreciation of that asset over a period, then, an amount equal to the amount by which that sum exceeds the sum which would have been so written off or retained for depreciation of that asset over that period, if that profit had not been made, shall be treated for the purposes of subsections (2) and (3) as a realised profit made over that period. | ||
(7) Where there is no record of the original cost of an asset of a company (whether acquired before, on or after the appointed day) or any such record cannot be obtained without unreasonable expense or delay, then, for the purposes of determining whether the company has made a profit or loss in respect of that asset, the cost of the asset shall be taken to be the value ascribed to it in the earliest available record of its value made on or after its acquisition by the company. | ||
(8) Where the directors of a company are, after making all reasonable enquiries, unable to determine whether a particular profit made before the appointed day is realised or unrealised they may treat the profit as realised, and where after making such enquiries they are unable to determine whether a particular loss so made is realised or unrealised, they may treat the loss as unrealised. | ||
(9) In this section “fixed asset” includes any other asset which is not a current asset. |