Section 65: Shareholder discounts

65. Shareholder discounts (1) The Board may resolve that the company shall offer shareholders discounts in respect of some or all of the goods sold or services provided by the company. (2) The Board shall not approve a discount scheme under subsection (1) unless it has previously resolved that the proposed discounts are— (a) fair and reasonable to the company and to all shareholders; and (b) made available to all shareholders or all shareholders of the same class on the same terms. (3) A discount scheme shall not be approved, or where it had previously been approved shall not be continued by the Board unless it has reasonable grounds to believe that the company satisfies the solvency test. C35 – 51 [Issue 1] Companies Act (4) Subject to subsection (5), a discount accepted by a shareholder under a discount scheme approved under this section shall not be a distribution for the purposes of this Act. (5) Where— (a) a discount is accepted by a shareholder under a scheme approved by the Board; and (b) after the scheme is approved or the discount was offered, the Board ceases to be satisfied on reasonable grounds that the company would satisfy the solvency test, section 66 shall apply in relation to the discount with such modifications as may be necessary as if the discount were a distribution that is deemed not to have been authorised.