Practical Law UK Glossary 3-107-6889 (Approx. 4 pages)
Glossary
Non-distributable reserve
A reserve that, to protect its creditors, a company is prohibited from distributing to its shareholders. Non-distributable reserves include the share premium account and the capital redemption reserve, both of which can only be used for a limited number of purposes (sections 610 and 733, Companies Act 2006). By contrast, a company's profit and loss account can be distributed to shareholders, to the extent that the profit balance is realised.