Companies Act 2014 section 1076

Assignment or release of company's right to purchase own shares

Section 1076 deals with the restrictions on a PLC assigning its right to purchase its own shares to a third party, and the conditions under which it may release (give up) that right.

• A PLC cannot assign to any third party its rights under an authorised contract to purchase its own shares — any such assignment is automatically void.
• A PLC may release (give up) its right to purchase its own shares, but only with prior shareholder approval by the appropriate type of resolution.
• For market purchase contracts, an ordinary resolution is required to authorise the release; for off-market purchase contracts, a special resolution is needed.
• Any release that has not been properly authorised by the required resolution before it is entered into is void, and certain procedural requirements from section 105 apply to such resolutions.