Part 18

Acquisition by limited company of its own shares
Chapter 6

Treasury shares

Treasury shares: disposal
727
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.
S. 727 wholly in force at 1.10.2009; s. 727 not in force at Royal Assent, see s. 1300; s. 727 in force for specified purposes at 20.1.2007 by S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); s. 727 otherwise in force at 1.10.2009 by S.I. 2008/2860, art. 3(l) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18)
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2
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))