The following Corporate practice note provides comprehensive and up to date legal information covering:
A limited company may buy back shares in itself, if certain conditions set out in the Companies Act 2006 (CA 2006) are met. This is known as a share buyback or a purchase of own 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.
The restrictions in CA 2006 relating to share buybacks do not apply to unlimited companies. For further information on this type of company, see Practice Note: Unlimited companies.
For a summary of the regime for carrying out a share buyback, see Practice Note: Share buybacks—a quick guide.
For a consideration of the law applicable to a share buyback and information on why a company might wish to carry one out, see Practice Note: Share buybacks—the legal framework.
Only one type of share buyback is possible for a private limited company. It may only make an off-market purchase of shares. Therefore, this Practice Note does not deal with a market (or ‘on-market’) purchase of shares.
For an explanation of the differences between an off-market share buyback and an on-market share buyback, see Practice Note: Share buybacks—the legal framework.
Before proceeding with a share buyback, a private limited company should consider a number of key issues relating to:
its power to lawfully carry out the share
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