Trevor v Whitworth
1887 · (1887) 12 App Cas 409
Posted By lanbuk.com
- Facts
- The company bought back some of its own shares. In the , the seller's executors claimed the unpaid price.
- Issue
- Could a company buy its own shares?
- Held
- No. A purchase by a company of its own shares returned capital to members and was unlawful, even if the articles allowed it.
- Principle
- A company may not return capital to its members except as statute allows.
- Why it matters
- The Act now allows buy-backs only on the conditions in sections 135 to 141.
Words and Latin in this note
- Winding up
- The process of ending a company's life: collecting and selling its assets, paying its debts and distributing any surplus, before dissolution. It may be by the court, voluntary, or subject to the court's supervision: section 343. Open the note.
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