• 4 Marks

BCL – Mar 2024 – L1 – Q5a – Types of Capital and the Financing of Companies

Identify and explain prohibited transactions in shares under the Companies Act, 2019 (Act 992).

State TWO (2) prohibited transactions in shares under section 58(1) of the Companies Act, 2019, Act 992 where a company limited by shares is prohibited from transacting in its shares.

(4 marks)

A company shall not:

  • Alter the number of its shares or the amount of money remaining payable on those shares.
  • Release a shareholder or former shareholder from a liability on the shares.
  • Provide financial assistance, directly or indirectly, for the subscription or purchase of the shares of the company or the shares of its holding company.
  • Acquire, by way of purchase or otherwise, any of its issued shares or any shares of its holding company.

(Any 2 points @ 2 marks each = 4 marks)

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