Companies Act 2014 section 106

Supplemental provisions in relation to section 105

Section 106 sets out the supplemental rules that apply when a company acquires its own shares, including what happens to those shares, the effect on share capital, and the required transfers to undenominated capital.

• Shares acquired by a company must be either cancelled or held as treasury shares
• Cancellation of acquired shares does not reduce the company's authorised share capital, and the company may reissue shares up to the nominal value of those cancelled
• Where shares are acquired out of distributable profits or partly from a fresh issue, a specified amount must be transferred to the company's undenominated capital
• Preference shares issued before 5 May 1959 cannot be purchased or redeemed under the own-share acquisition provisions and are subject to a separate redemption regime