A public company may only make a distribution—
if the amount of its net assets is not less than the aggregate of its called-up share capital and undistributable reserves, and
if, and to the extent that, the distribution does not reduce the amount of those assets to less than that aggregate.
For this purpose a company's "net assets" means the aggregate of the company's assets less the aggregate of its liabilities.
"Liabilities" here includes—
where the relevant accounts are Companies Act accounts, provisions of a kind specified for the purposes of this subsection by regulations under section 396;
where the relevant accounts are IAS accounts, provisions of any kind.
A public company must not include any uncalled share capital as an asset in any accounts relevant for purposes of this section.
Subsection (1) has effect subject to sections 832 and 835 (investment companies etc: distributions out of accumulated revenue profits).