SECTION 639

Subscription to or purchase by the company of its own shares, either directly or by a person acting in his own name but on behalf of the company, shall be prohibited. In like manner, the company may not grant advances or loans or provide security for subscription to or purchase of its own shares by a third party. However, the ordinary general meeting which has ordered a reduction of capital not justified by losses may authorize the board of directors or the managing director, as the case may be, to buy a specific number of shares with a view to cancelling them. The founders or, in the case of an increase of capital, the members of the board of directors or the managing director shall be bound, under the conditions laid down in Articles 738 and 740 of this Uniform Act, to pay up the shares subscribed to or acquired by the company in violation of the provisions of the first paragraph of this article. Likewise, where shares are subscribed to or acquired by a person acting in his own name but on behalf of the company, such person shall be bound to pay up the shares jointly with the founders or, as the case may be, the members of the board of directors or the managing director. The subscriber shall also be considered as having subscribed to shares on his own account.