Private company redemptions of shares—initial considerations

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Published by a LexisNexis Corporate expert
Practice notes

Private company redemptions of shares—initial considerations

Copyright © 2025 LexisNexis

Published by a LexisNexis Corporate expert

Practice notes
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A limited company that proposes to carry out a redemption of redeemable shares must comply with the provisions of the Companies Act 2006 (CA 2006). 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.

For a discussion of the legal requirements that a company must comply with in order to issue redeemable shares, and the reasons why a company may redeem its shares, see Practice Note: Issue of redeemable shares.

Initial considerations

Before proceeding with a redemption of shares, a private limited company should consider:

  1. •

    the terms, conditions and manner of the redemption of those shares

  2. •

    whether its share capital meets the requirements for a redemption of shares laid down by CA 2006, Pt 18

  3. •

    any approvals that may need to be obtained in relation to the redemption of shares

  4. •

    the relevance of CA 2006 provisions relating to substantial property transactions to the redemption of shares

  5. •

    whether the company's banking facilities contain any restrictions that could affect

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Private company definition
What does Private company mean?

A private company is not a public company within the meaning of the Companies Act 2006 and is prohibited from making any offer of securities of the company to the public.

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