725Treasury shares: maximum holdings
(1)Where a company has shares of only one class, the aggregate nominal value of shares held as treasury shares must not at any time exceed 10% of the nominal value of the issued share capital of the company at that time.
(2)Where the share capital of a company is divided into shares of different classes, the aggregate nominal value of the shares of any class held as treasury shares must not at any time exceed 10% of the nominal value of the issued share capital of the shares of that class at that time.
(3)If subsection (1) or (2) is contravened by a company, the company must dispose of or cancel the excess shares, in accordance with section 727 or 729, before the end of the period of twelve months beginning with the date on which that contravention occurs.
The “excess shares” means such number of the shares held by the company as treasury shares at the time in question as resulted in the limit being exceeded.
(4)Where a company purchases qualifying shares out of distributable profits in accordance with section 724, a contravention by the company of subsection (1) or (2) above does not render the acquisition void under section 658 (general rule against limited company acquiring its own shares).