Companies Act 2014 section 1074

Market purchase of own shares

Section 1074 sets out the requirements for a public limited company (PLC) to buy its own shares on the open market or on an overseas market, including the shareholder approval needed and the conditions that must be specified in the authorising resolution.

• A PLC must obtain an ordinary resolution before making a market purchase or overseas market purchase of its own shares; this authority can be varied, revoked or renewed by further ordinary resolution.
• The authority must specify the maximum number of shares to be acquired, the maximum and minimum purchase prices (either as fixed sums or by a defined formula), and an expiry date no later than five years from the date the resolution is passed.
• Individual purchase contracts do not each need separate shareholder approval — once the general authority is in place, any contract entered into under it is deemed to be authorised.
• A PLC may complete a purchase after the authority has expired, provided the contract was concluded before expiry and the terms of the authority permitted contracts that could be executed wholly or partly after that date.