Companies Act 2014 section 105

Acquisition of own shares

Section 105 sets out the rules governing how a company may acquire its own shares, including the permitted sources of funding, the authorisation requirements, and the procedural safeguards that must be followed.

• A company may acquire its own shares by purchase, or in the case of redeemable shares by redemption or purchase, funded either from distributable profits or from the proceeds of a fresh share issue where the acquired shares are to be cancelled
• Where shares were originally issued at a premium, any premium payable on their acquisition may be funded from a new share issue only up to the lower of the total premiums originally received or the company's current undenominated capital, with that capital being reduced accordingly
• The acquisition must be authorised by the company's constitution, the rights attaching to the shares, or a special resolution — but a member whose shares are the subject of the resolution cannot use the votes attached to those shares to secure its passage
• Where authorisation is by special resolution, the purchase contract or a memorandum of its terms (including the names of affected shareholders) must be made available to members for inspection, and similar requirements apply to any variation of the contract or exercise of an option to purchase

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