55Shareholder discounts

1. The board of a company may resolve that the company offer shareholders discounts in respect of some or all of the goods sold or services provided by the company.

2. The board may approve a discount scheme under subsection (1) only if it has previously resolved that the proposed discounts are—

3. fair and reasonable to the company and to all shareholders; and
4. to be available to all shareholders or all shareholders of the same class on the same terms.

5. A discount scheme may not be approved or continued by the board unless it is satisfied on reasonable grounds that the company satisfies the solvency test.

6. Subject to subsection (5), a discount accepted by a shareholder under a discount scheme approved under this section is not a distribution for the purposes of this Act.

7. Where—

8. a discount is accepted by a shareholder under a scheme approved or continued by the board; and
9. at the time the scheme was approved or the discount was offered, the board ceased to be satisfied on reasonable grounds that the company would satisfy the solvency test,—
the provisions of section 56 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.