Trevor v Whitworth (1887) was the case in which the doctrine of capital maintenance was established. In this case, the House of Lords stated that the company is not permitted to acquire its own shares as it results in reduction in the company’s capital.
8/6/2020 · Trevor v Whitworth: HL 1887. It is a fundamental rule of company law that that the Companies Acts by implication prohibit a company from returning capital to shareholders except in one of the ways expressly permitted by the Acts. A purchase of shares by a company which is not authorised by the Companies Acts is unlawful and ultra vires.
Trevor v Whitworth (1887) 12 App Cas 409 is a UK company law case concerning share buybacks. It held they were unlawful. The case is often used in support for the Capital Maintenance Rule. The rule coming from the case itself has since been reformed by statute in several commonwealth countries.
Trevor v Whitworth (1887 ) 1 Doctrine of capital maintenance established here. 1.1 Facts: Shareholder sold back shares he had in the company, back to the company. … 4.1 However, there are some statutory exceptions . 4.2 Lightman J.: ‘the court will look carefully at such transactions to see that the directors of the acquiring company have acted …
11/19/2013 · trevor v whitworth [1887] case i need to get this case , what is the case is in about the face and the courts decision Chung Khiaw Bank Ltd. v . Hotel Rasa Sayang Sdn. Bhd. & Anor[1990] 1 MLJ 356. The appellants extended loans to the respondents and.
SELF-ACQUISITION PROHIBITION: Section 259A Section 259A reflects the incorporation of the rule in Trevor v Whitworth into the Corporations Act. As a general rule, a company is prohibited from directly acquiring its own shares or shares in a company that controls it.
at 681-2; Trevor v Whitworth (1887) 12 App Cas 409 (HL), at 416-17. 6 This rule will be discussed in detail later in this dissertation. 7 ‘The common law dictated that the amount of capital is provided for in the memorandum of association divided into a certain number of shares of a certain fixed amount. This cannot be changed by way of, Trevor v Whitworth is one of the leading cases of company law. In this case, a company re-purchased almost a quarter of its own share so during the liquidation of the company, one of the company’s shareholder requested that the balance that remained be transferred to him in lieu on the amount the company owed him. The practice is prohibited …
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