Introduction Overview Chapter 3: Matters which are not distributions Section 1038: Section 1037: effect of entitlement to profits
3061.This section sets out the second condition concerning the seller’s interest in the company after the purchase of its own shares. It is based on section 221(5), (6), (7) and (8) of ICTA.
3062.The seller’s entitlement to the profits of the company after the purchase must be no more than 75% of what it was before the purchase. There are further requirements in section 1039 where the company is a member of a group.