Rules in the Companies Act 2006 (CA 2006) that, subject to some exceptions, prohibit either:

(Sections 677 to 683, CA 2006.)

The prohibition covers any financial assistance given to reduce or discharge any liability incurred by the company or any third party for the purpose of the acquisition.

A private company may give financial assistance for the purchase of shares in itself or another private company, but a private company may not give financial assistance for the purpose of the acquisition of shares in a public parent company.

For further details, see Practice note, Financial assistance.