BLP (21) - Acquisitions (inc. FA)
Terms
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- In what kind of sale is financial assistance relevant?
- Share sale
- Aside from the purchase of shares in the context of a share sale, when do you the rules related to financial assistance need to be considered?
- The issue of shares by a company to an investor
- Who will be the company in which shares are being acquired for the purpose of a share sale?
- The Target
- Who will be the company in which shares are being acquired for the purpose of an issue of new shares to an investor?
- The company doing the issuing
- What are the consequences of carrying out prohibited financial assistance?
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1. Fine for the Co;
2. Fine/imprisonment for individuals in default;
3. Transaction may be void and unenforceable.
- When were the provisions on financial assistance related to private companies repealed?
- 1 October 2008, and in relation to public companies on 1 October 2009.
- What is the key in determining which CA rules related to FI apply?
- The date of the transaction itself.
- To which companies did the prohibition on financial assistance apply under s. 151 CA 1985?
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1. The target company;
2. (whether private or public);
3. and any of its subsidiaries;
4. (whether private or public). - What were private companies above to do under the old regime for the purpose of FI that had been given?
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1. Use the 'whitewash procedure';
2. (set out in ss. 155 - 158 CA 06);
3. To make an otherwise unlawful transaction lawful. - What was required for the purpose of the whitewash procedure under the old regime?
- Approval by SR and a directors' statutory declaration of solvency.
- What were the consequences of breaching the CA 1985 FI provisions?
- Same as under the current regime.