4 A company may not provide financial assistance for the purchase of its own shares

Belmont Finance Co v Williams Furniture Ltd (No 2) (1980) CA A company known as ‘City’ owned all the shares in Belmont. The directors of Belmont, along with others, agreed to a transaction one of the terms of which was that a property was sold to Belmont for £500,000. This sum was paid by Belmont to the vendors of the property. City then sold all the shares it owned in Belmont to the vendors of the property for £489,000.