Companies Act 2014 section 109

Treasury shares

Section 109 sets out the rules governing treasury shares, including the maximum a company may hold, the restrictions that apply while shares are held as treasury shares, and the conditions under which they may be cancelled or re-issued.

• A company may not hold treasury shares with a nominal value exceeding 10% of its company capital at any one time, and certain shares held by subsidiaries or nominees count towards this limit.
• While shares are held as treasury shares, all voting rights are suspended, no dividends or other payments are payable on them, and their accounting treatment is governed by section 320(1).
• Treasury shares may be either cancelled (in which case section 106 applies as if they were cancelled on acquisition) or re-issued as shares of any class, subject to a special resolution setting the re-allotment price range.
• The re-allotment price range must be fixed by special resolution before any re-allotment contract is entered into, may be varied or renewed by further special resolution, and remains effective for a requisite period of 18 months (or a shorter period if specified).