A purchase by a company of its own shares. Any acquisition of shares by a limited company must comply with part 18 of the Companies Act 2006. In addition, a listed company must comply with the Listing Rules and the Disclosure Guidance and Transparency Rules in relation to an own share purchase, while an alternative investment market (AIM) company must comply with the AIM Rules. Each may follow relevant institutional investor guidance.
It is possible for a limited company to make an on-market share buyback or an off-market share buyback. In either case, the purchase of own shares may be by way of tender offer. A limited company that has bought back its shares may, in certain circumstances, hold them as treasury shares, otherwise they must be cancelled.