STSM075010 - Companies and shareholders: company바카라 사이트™s purchase of own shares: legal restrictions
Common law and company law impose restrictions on companies buying back their own shares (Companies Act 2006/Part 18). A company may:
- Redeem its own redeemable shares, or
- Contract with shareholders to make an 바카라 사이트˜off-market바카라 사이트™ purchase of its shares, if approved by special resolution at a general meeting of the shareholders, or
- (Listed companies only) make a 바카라 사이트˜market purchase바카라 사이트™ of its shares through the exchange, subject to ordinary resolution at a general meeting of the shareholders, provided in each case that the company바카라 사이트™s Articles of Association permit it to do so.
All the above options are subject to additional restrictions in order to maintain the company바카라 사이트™s capital, to protect creditors and shareholders. Company funds may not be used to fund the redemption or purchase of the company바카라 사이트™s own shares except in approved ways:
- Companies are permitted to fund redemptions or purchases of their own shares from distributable profits (payable as dividends) or from the proceeds of issuing new shares, as these funding methods do not affect the company바카라 사이트™s capital.
- A reduction of capital may be sanctioned by Court scheme under the provisions of the Companies Act (CA06/S641).
- Private companies may fund redemptions or off-market purchases by a 바카라 사이트˜permissible capital payment바카라 사이트™ if it complies with certain statutory procedures and is approved by special resolution of the shareholders (CA06/S710-712).