Companies Act 2014 section 1398

Power of company to purchase own shares

Section 1398 sets out the power of an investment company to buy back its own shares and the conditions that apply to such purchases.

• An investment company may purchase its own shares on whatever terms and in whatever manner its articles of association provide.
• Where the buy-back is funded directly or indirectly out of the company's assets at the request of the shareholders, the shares must be fully paid before they can be repurchased.
• The fully-paid requirement does not prevent a purchase carried out under the conditions set out in section 1399(2), which deals with the treatment of purchased shares.
• Nothing in the Companies Act 2014 requires an investment company to create or maintain any reserve account in connection with share buy-backs.

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