Q&As

How can a company redeem its redeemable shares where the terms of redemption are not set out in the articles of association, any shareholder resolution or statement of capital (SH01)?

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Published on LexisPSL on 21/01/2021

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

  • How can a company redeem its redeemable shares where the terms of redemption are not set out in the articles of association, any shareholder resolution or statement of capital (SH01)?

Section 684 of the Companies Act 2006 (CA 2006) provides that a limited company having a share capital may issue shares that can be redeemed at the option of the company or a shareholder, provided that:

  1. if it is a private limited company, its articles of association do not exclude or restrict the issue of redeemable shares, and

  2. if it is a public limited company, its articles contain an express authorisation for the company to issue redeemable shares

CA 2006, s 685(1) provides that the directors of a limited company may determine the terms, conditions and manner of redemption of shares if they are authorised to do so:

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