U - Unlawful distributions
5/5/20
CHALCOT TRADING LTD v RALPH [2020] EWHC 1054 (Ch)
A company entered into a share scheme designed to avoid corporation tax which failed to achieve that purpose. The company failed in a claim to set aside the scheme on the grounds that it represented an unlawful distribution to shareholders and contravened restrictions imposed by ss 580 and 552 of the Companies Act 2006 on the issue of shares at a discount and payment of commission. Reviews principles as to capital distributions [135] and when remuneration is a disguised distribution [166]. On the facts the payments were remuneration [220]. A claim to set aside the contracts as void for common mistake also failed [285].