Share Buyback

Guidance

We believe everyone is entitled to high quality legal advice, so we’ve put together some free guides on key areas of corporate and commercial law. Just select the topic you want to explore.

WHAT IS A SHARE BUYBACK?

share buyback is a purchase by a company of its own shares. They are normally undertaken in order to return cash to shareholders.

If a company wishes to buy back its shares it must follow the procedures set-out in the Companies Act 2006, including a requirement that the buyback is made pursuant to a contract approved by the company’s shareholders.

Do I need help?

If your company is considering purchasing its own shares then you will need to consider whether a buyback is permitted under the Companies Act 2006. You will need to produce resolutions, make filings and draft documentation (including a buyback contract). You will also need to involve your auditors if the company intends to purchase shares out of capital.

Our Share Buyback service provides you with all the necessary advice and documentation to effect a share buyback. We provide clear and straightforward guidance, draft all of the required documentation and make the appropriate filings with Companies House.

Click the following links for a summary of the procedure for a company buying back shares out of profits or a fresh issue of shares and for buying back shares out of capital.

If you are considering a buyback of shares then you should also consider the most appropriate way to effect the buy back. We would be happy to advise you in this regard.

Our Share Buyback service is suitable for private limited companies and unlisted public limited companies incorporated in the United Kingdom.

What does our package include?

  1. A review of the company’s Articles of Association and any other document that may affect the buyback such as a Shareholders’ Agreement.
  2. Directors’ and shareholder resolutions to approve the buyback.
  3. A purchase contract drafted in accordance with your instructions.
  4. A Directors’ Statement, if appropriate.
  5. Liaising with the Company’s auditors/accountants as required.
  6. Filings at Companies House.
  7. Updating company registers, cancelling and issuing share certificates as required.
  8. If the buyback is financed by a fresh issue of shares we will also prepare all necessary documentation to effect the issue.

SHARE BUYBACK SERVICE

From £975+ VAT

Please contact us for fixed quotation.

A limited company can purchase its own shares out of:

  • distributable profits;
  • the proceeds of a fresh issue of shares; or
  • in the case of private companies only, capital (provided that certain requirements are met).

The ability of a company to buyback shares is subject to any restrictions contained in its Articles of Association and/or any Shareholders’ Agreement.

NOTE: You may also wish to consider our Reduction of Share Capital service. We would be happy to discuss your requirements and recommend an appropriate course of action.