C2C1Part 18Acquisition by limited company of its own shares

Annotations:
Modifications etc. (not altering text)
C2

Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))

Chapter 6Treasury shares

I1727Treasury shares: disposal

1

Where shares are held as treasury shares, the company may at any time—

a

sell the shares (or any of them) for a cash consideration, or

b

transfer the shares (or any of them) for the purposes of or pursuant to an employees' share scheme.

2

In subsection (1)(a) “cash consideration” means—

a

cash received by the company, or

b

a cheque received by the company in good faith that the directors have no reason for suspecting will not be paid, or

c

a release of a liability of the company for a liquidated sum, or

d

an undertaking to pay cash to the company on or before a date not more than 90 days after the date on which the company agrees to sell the shares, or

e

payment by any other means giving rise to a present or future entitlement (of the company or a person acting on the company's behalf) to a payment, or credit equivalent to payment, in cash.

For this purpose “cash” includes foreign currency.

3

The Secretary of State may by order provide that particular means of payment specified in the order are to be regarded as falling within subsection (2)(e).

4

If the company receives a notice under section 979 (takeover offers: right of offeror to buy out minority shareholders) that a person desires to acquire shares held by the company as treasury shares, the company must not sell or transfer the shares to which the notice relates except to that person.

5

An order under this section is subject to negative resolution procedure.