The regulation of corporate dealings in own shares: the position in Botswana and Britain

One of the cardinal principles in company law is the maintenance of capital. The principle has four consequential rules. First, a company generally must not purchase its own shares subject to certain exceptions. Second, a subsidiary company generally must not be a member of the holding company. Third, it is generally unlawful for a company to give any kind of financial assistance for the acquisition of its own shares or those of its holding company, by any person, subject to certain exceptions. Fourth, dividends must not be paid to the shareholders except out of profits. The first three rules regulate a company's dealing in its own shares. This article is an analysis of these three rules in the company law of Botswana and Britain with particular emphasis on the rules against corporate share repurchase and financial assistance.