Trevor v Whitworth (1887) 12 App Cas 409, HL
This case is authority for the fact that it is a fundamental rule of company law that that the Companies Acts by implication prohibit a company from returning capital to shareholders except in one of the ways expressly permitted by the Acts.
Held: Lord Watson (pg. 423) "Paid-up capital may be diminished or lost in the course of the company?s trading: that is a fact which no legislation can prevent; but persons who deal with, and give credit to, a limited company, naturally rely upon the fact that the company is trading with a certain amount of capital already paid, as well as upon the responsibility of its members for the capital remaining at call; and they are entitled to assume that no part of the capital which has been paid into the coffers of the company has subsequently been paid out, except in the legitimate course of its business."
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