Chapter 1 Chapter 1 Restrictions On When Distributions May Be Made
760. Meaning Of “Distribution”(1) In this Part “distribution” means every description of distribution of a company's assets to its members, whether in cash or otherwise, subject to the following exceptions.(2) The following are not distributions for the purposes of this Part-(a) an issue of shares as fully or partly paid bonus shares,(b) the reduction of share capital-(i) by extinguishing or reducing the liability of any of the members on any of the company's shares in respect of share capital not paid up, or(ii) by repaying paid-up share capital,(c) the redemption or purchase of any of the company's own shares out of capital (including the proceeds of any fresh issue of shares) or out of unrealised profits in accordance with Chapter 3, 4 or 5 of Part 17,(d) a distribution of assets to members of the company on its winding up.
761. Distributions To Be Made Only Out Of Profits Available For The Purpose(1) A company may only make a distribution out of profits available for the purpose.(2) A company's profits available for distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made.
762. Net Asset Restriction On Distributions By Public Companies(1) A public company may only make a distribution-(a) if the amount of its net assets is not less than the aggregate of its called-up share capital and undistributable reserves, and(b) if, and to the extent that, the distribution does not reduce the amount of those assets to less than that aggregate.(2) For this purpose a company's “net assets” means the aggregate of the company's assets less the aggregate of its liabilities.(3) “Liabilities” here includes provisions of any kind.(4) A company's undistributable reserves are-(a) its capital redemption reserve,(b) the amount by which its accumulated, unrealised profits (so far as not previously utilised by capitalisation) exceed its accumulated, unrealised losses (so far as not previously written off in a reduction or reorganisation of capital duly made),(c) any other reserve that the company is prohibited from distributing-(i) by any regulation or law applicable in the Abu Dhabi Global Market (other than one contained in this Part), or(ii) by its articles.The reference in subsection (b) to capitalisation does not include a transfer of profits of the company to its capital redemption reserve.