Companies Act

493. Distributions in kind: treatment of unrealised profits

Edition: 2024-12-27 · In force

493. Distributions in kind: treatment of unrealised profits

(1)This section applies if—

(a)a company makes a distribution consisting of or including, or treated as arising in consequence of, the sale, transfer or other disposition by the company of a non-cash asset; and

(b)any part of the amount at which that asset is stated in the relevant accounts represents an unrealised profit.

(2)For the purpose of this Part, the profit is treated as a realised profit—

(a)for the purpose of determining the lawfulness of the distribution in accordance with this Part (whether before or after the distribution takes place); and

(b)in relation to anything done with a view to or in connection with the making of the distribution, for the purpose of the application of any provision of the regulations (if any) under which only realised profits are to be included in, or transferred to, the profit and loss account.

(c)if the regulations make provision in relation to the making of distributions —for the purpose of the application of any provision of the regulations under which only realised profits are to be included in, or transferred to, the profit and loss account.

Division 6 — Supplementary provision

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Source: Kenya Law