Outline the circumstances under which a company may give financial assistance for purchase of, or subscription for its shares

The proviso to Section 56(1) of the Companies Act sets out the circumstances in which a company finance the purchase of its shares.
• where the lending of money is part of the ordinary business of the company and the same is lent in the ordinary course of such business
• where the company has in force a scheme to advance loans to trustees to purchase or subscribe for fully paid shares of the company for the benefit of all employees including salaried directors.
• where the company has in force a scheme to advance loan to all bona fide employees other than directors to enable them purchase or subscribe for fully paid shares of the company to hold way of beneficial ownership.

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