Part 18 Acquisition by Limited Company of its Own Shares (ss 658-737)
Part 18 Acquisition by Limited Company of its Own Shares (ss 658-737)
Companies Act 2006 | Legislation

658 General rule against limited company acquiring its own shares

(1)     A limited company must not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with the provisions of this Part.

(2)     If a company purports to act in contravention of this section—

(a)     an offence is committed by—

(i)     the company, and

(ii)     every officer of the company who is in default, and

(b)     the purported acquisition is void.

(3)     A person guilty of an offence under this section is liable—

(a)     on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b)     on summary conviction—

(i)     in England and Wales, to imprisonment for a term not exceeding twelve months or a fine not exceeding the statutory maximum (or both);

(ii)     in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum (or both).


659 Exceptions to general rule

(1)     A limited company may acquire any of its own fully paid shares otherwise than for valuable consideration.

(2)     Section 658 does not prohibit—

(a)     the acquisition of shares in a reduction of capital duly made;

(b)     the purchase of shares in pursuance of an order of the court under—

(i)     section 98 (application to court to cancel resolution for re-registration as a private company),

(ii)     section 721(6) (powers of court on objection to redemption or purchase of shares out of capital),

(iii)     section 759 (remedial order in case of breach of prohibition of public offers by private company), or

(iv)     Part 30 (protection of members against unfair prejudice);