Subject to the Solvency Test there’s no such thing as non-distributable reserves…Great !
49. In this Act, unless the context otherwise requires — (a) a company satisfies the solvency test if —
(i) the company is able to pay its debts as they become due in the normal course of the company’s business; and
(ii) the value of the company’s assets exceeds the value of its liabilities; and (b) “distribution” in relation to a distribution by a company to a member, means — (i) the direct or indirect transfer of any assets, other than the company’s own shares, to or for the benefit of the member; or
(ii) the incurring of a debt to or for the benefit of the member, in relation to shares held by a shareholder, or the entitlements to distributions of a member who is not a shareholder, and whether by means of the purchase of an asset, the purchase redemption or other acquisition of shares, a transfer or assignment of indebtedness or otherwise, and includes a dividend.
50. Subject to this Act and to the memorandum and articles of the company, the directors of a company (other than a protecte dcell company) may authorise a distribution by the company to members at such time and of such amount as they think fit if they are satisfied, on reasonable grounds, that the company will,immediately after the distribution, satisfy the solvency test.