Part V

Share Capital, its Increase, Maintenance and Reduction
Chapter VII

Redeemable Shares; Purchase by a Company of its Own Shares

Redemption and purchase generally

Authority for market purchase.
166
1
A company shall not make a market purchase of its own shares unless the purchase has first been authorised by the company in general meeting.
2
That authority—
a
may be general for that purpose, or limited to the purchase of shares of any particular class or description, and
b
may be unconditional or subject to conditions.
3
The authority must—
a
specify the maximum number of shares authorised to be acquired,
b
determine both the maximum and the minimum prices which may be paid for the shares, and
c
specify a date on which it is to expire.
4
The authority may be varied, revoked or from time to time renewed by the company in general meeting, but this is subject to subsection (3) above; and in a resolution to confer or renew authority, the date on which the authority is to expire must not be later than 18 months after that on which the resolution is passed.
5
A company may under this section make a purchase of its own shares after the expiry of the time limit imposed to comply with subsection (3)(c), if the contract of purchase was concluded before the authority expired and the terms of the authority permitted the company to make a contract of purchase which would or might be executed wholly or partly after its expiration.
6
A resolution to confer or vary authority under this section may determine either or both the maximum and minimum prices for purchase by—
a
specifying a particular sum, or
b
providing a basis or formula for calculating the amount of the price in question without reference to any person’s discretion or opinion.
7
Chapter 3 of Part 3 of the Companies Act 2006 (resolutions affecting a company's constitution) applies to a resolution of a company conferring, varying, revoking or renewing authority under this section.
S. 166(7) substituted (1.10.2007) by The Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/2194), art. 10(1), Sch. 4 para. 1(8) (with art. 12)
Ss. 126-182 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))