Q&As

Does a failure to file the Companies House forms required on a share buyback render the share buyback void?

read titleRead full title
Published on LexisPSL on 24/05/2016

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Does a failure to file the Companies House forms required on a share buyback render the share buyback void?
  • The Duomatic principle

This Q&A considers whether a failure to file Forms SH03 and SH06 at Companies House in relation to a share buyback would render the share buyback void pursuant to section 658 of the Companies Act 2006 (CA 2006).

This Q&A assumes that share buyback in question has otherwise been carried out in accordance with the relevant provisions of CA 2006.

CA 2006, s 658 states that a limited company must not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with the provisions of CA 2006, Pt 18.

If a company breaches CA 2006, s 658:

  1. the purported share buyback is void (the effect of this is that any shareholder seeking to sell their shares remains the holder of those shares and the shares remain in issue), and

  2. an offence is committed by the company and every officer of the company who is in default

A person guilty of an offence under CA 2006, s 658 is liable:

  1. on conviction on indictment, to imprisonment for up to two years, an unlimited fine or both, or

Related documents:

Popular documents