Explanatory Notes

Companies Act 2006

2006 CHAPTER 46

8 November 2006

Commentary

Part 18: Acquisition by Limited Company of Its Own Shares

Chapter 4: Purchase of Own Shares
Section 690: Power of limited company to purchase own shares

1005.This section replaces section 162(1) of the 1985 Act and restates section 162(3) of that Act.

1006.In line with the recommendations of the CLR (Completing the Structure, paragraph 2.15), section 690 removes the requirement for prior authorisation in a company’s articles for a purchase of own shares (including any redeemable shares) by the company but makes it clear that, if they wish, the members may restrict or prohibit a purchase of own shares by including a provision to this effect in the company’s articles.