Companies Act 2014 section 82

Financial assistance for acquisition of shares

Section 82 prohibits a company from providing financial assistance to help any person acquire shares in the company or its holding company, while setting out a range of specific exemptions from that prohibition.

• A company is generally prohibited from giving financial assistance — whether directly, indirectly, by loan, guarantee, security or otherwise — for the purpose of anyone acquiring its shares or shares in its holding company.
• The prohibition does not apply where the company's principal purpose in giving assistance is not the share acquisition itself, or where the assistance is merely incidental to a larger purpose, provided it is given in good faith in the company's interests.
• Numerous specific exemptions exist, including assistance given under the Summary Approval Procedure, dividend payments, discharge of lawful liabilities, employee share schemes, refinancing of previously approved assistance, and various expenses related to share subscriptions, takeovers and stock exchange listings.
• Any transaction that breaches this section is voidable by the company against any person who had notice of the contravention, and both the company and any officer in default commit a category 2 offence.

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