ADVOKS GLOBAL · KENYA
Companies Act
423. Interpretation: Part XVI
Edition: 2024-12-27 · In force
423. Interpretation: Part XVI
(1)In this Part—"distributable profits", in relation to the giving of any financial assistance—(a)means those profits out of which the company could lawfully make a distribution equal in value to that assistance; and(b)if the financial assistance consists of or includes, or is treated as arising in consequence of, the sale, transfer or other disposition of a non-cash asset—includes any profit that, if the company were to make a distribution of that kind, would be available for that purpose;"distribution" has the same meaning as in Part XVII (How company's assets are to be distributed).(2)In this Part—(a)a reference to a person incurring a liability includes circumstances in which the person's financial position changes because of an agreement or arrangement (whether enforceable or unenforceable, and whether made on the person's own account or with another person); and(b)a reference to a company giving financial assistance for the purpose of reducing or discharging a liability incurred by a person in order to acquire shares includes giving assistance for the purpose of wholly or partly restoring the person's financial position to what it was before the acquisition took place.(3)For the purposes of this Part, a director of a company is an employee of the company for the purposes of a pension scheme or an employees' share scheme.