What is the ratio in Trevor v Whitworth?

Companies cannot purchase their own shares without express statutory authorization as this violates the capital maintenance principle and prejudices creditors.

What did the court decide in Trevor v Whitworth?

The House of Lords held that the company's purchase of its own shares was invalid and the payment was recoverable by the liquidator.

Why is Trevor v Whitworth important for share capital?

It established the prohibition on companies buying their own shares and demonstrates the importance of capital maintenance in protecting creditors.

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