Aveling_Barford_Ltd_v_Period_Ltd
Aveling Barford Ltd v Perion Ltd
UK company law case concerning reduction of capital
Aveling Barford Ltd v Perion Ltd [1989] BCLC 626 is a UK company law case concerning reduction of capital. It held that a sale at an undervalue of an asset was a dressed-up distribution. As the company did not have distributable reserves, the sale was in consequence an unlawful reduction of capital.
The law in relation to the transfer of assets at an undervalue has been clarified in CA 2006, and the amount of the distribution arising in consequence of a sale at undervalue is now determined in accordance with section 845.