Companies Act 2014 section 102

Company acquiring its own shares, etc. — permissible circumstances and prohibitions

Section 102 sets out the permitted circumstances in which a company may acquire its own fully paid shares and prohibits a private limited subsidiary from acquiring shares in its parent public company.

• A company may acquire its own fully paid shares only in specified circumstances, including transfer or surrender for no consideration, capital reduction, court order, redemption or purchase of redeemable shares, share buyback, redemption of certain pre-1959 preference shares, or as part of a merger, division or cross-border conversion
• Any acquisition of own shares outside these permitted circumstances is a criminal offence (category 2) and the purported acquisition is void
• A private limited subsidiary may not subscribe for new shares in, or purchase partly paid shares in, its parent public company; any such subscription is void and constitutes a category 2 offence
• Where a private limited subsidiary holds shares in its parent public company in prohibited circumstances, it must dispose of them within 12 months or face further statutory consequences