Q&As

What are the options for obtaining or cancelling an issued share?

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Published on LexisPSL on 27/04/2015

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

  • What are the options for obtaining or cancelling an issued share?

This Q&A looks at the options available to obtain or cancel ordinary shares held by a shareholder in a private company that has articles of association in the form of the model articles (see precedent: Model articles—private limited company—after 28 April 2013).

The Companies Act 2006 (CA 2006) sets out the ways in which a private company’s issued share capital may be dealt with. It provides that:

  1. shares may be transferred (CA 2006, s 544)

  2. share capital may be altered in a number of prescribed ways, eg it may be reduced (CA 2006, ss 617(1)–617(4))

  3. shares may be bought back by a company (CA 2006, ss 617(5)(a), 617(5)(b), Pt 18)

  4. shares may be redeemed (CA 2006, s 617(5)(a), Pt 18)

  5. shares may be forfeited or surrendered in li

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