A limited company may hold, or deal with, shares in itself, if certain conditions set out in the Companies Act 2006 (CA 2006) are met. Those shares are held in treasury and are referred to as the company's treasury shares.

In addition to the provisions of CA 2006, there are other rules and guidelines that are relevant to a listed company or an aim company. In particular, a listed company must have regard to the UK Listing Rules (UKLRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must have regard to the AIM Rules for Companies (AIM Rules), but these do not specifically refer to share buybacks, so AIM Regulation has confirmed that compliance by an AIM company with the UKLRs in relation to share buybacks would represent best practice in most circumstances. An AIM company is also subject to DTR 5. In addition, both types of company may follow institutional investor guidance.

The treasury shares regime is set out in CA 2006, ss 724–732. If a company contravenes any of these provisions (except CA 2006, s