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ARTICLE · 21 FEBRUARY 2007

The Financial Assistance Regime in Guernsey, September 2006

Carey Olsen
Carey Olsen
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Carey Olsen

Carey Olsen

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Section 1 of the Companies (Financial Assistance for Acquisition of Own Shares) Ordinance, 1998 restricts the giving of financial assistance by a Guernsey company or any of its subsidiaries which is a Guernsey company, for the purpose of the acquisition of shares in GCo or in reducing or discharging a liability incurred for the purpose of the acquisition.

GuernseyWealth Management
Ben Morgan
Ben Morgan
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Introduction

Section 1 of the Companies (Financial Assistance for Acquisition of Own Shares) Ordinance, 1998 ("FAO") restricts the giving of financial assistance by a Guernsey company ("GCo") or any of its subsidiaries which is a Guernsey company, for the purpose of the acquisition of shares in GCo or in reducing or discharging a liability incurred for the purpose of the acquisition.

The FAO is modelled on, but is different in some important respects from, sections 151 to 158 of the Companies Act 1985 of the United Kingdom.

This briefing provides an overview of the financial assistance regime, identifies some of the key differences between the FAO and sections 151 to 158 of the Companies Act 1985 of the United Kingdom ("CA85"), highlights the legal consequences of a breach of the FAO and summarises the criteria, compliance with which will prevent from becoming unlawful for the purposes of the FAO any transaction which would otherwise be lawful under that Ordinance.

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