|
| |
|
698 | Terms and manner of redemption |
| |
(1) | The directors of a limited company may determine the terms, conditions and |
| |
manner of redemption of shares if they are authorised to do so— |
| |
(a) | by the company’s articles, or |
| |
(b) | by a resolution of the company. |
| 5 |
(2) | A resolution under subsection (1)(b) may be an ordinary resolution, even |
| |
though it amends the company’s articles. |
| |
(3) | Where the directors are authorised under subsection (1) to determine the |
| |
terms, conditions and manner of redemption of shares— |
| |
(a) | they must do so before the shares are allotted, and |
| 10 |
(b) | any obligation of the company to state in a statement of capital the |
| |
rights attached to the shares extends to the terms, conditions and |
| |
| |
(4) | Where the directors are not so authorised, the terms, conditions and manner of |
| |
redemption of any redeemable shares must be stated in the company’s articles. |
| 15 |
699 | Payment for redeemable shares |
| |
(1) | Redeemable shares in a limited company may not be redeemed unless they are |
| |
| |
(2) | The terms of redemption of shares in a limited company may provide that the |
| |
amount payable on redemption may, by agreement between the company and |
| 20 |
the holder of the shares, be paid on a date later than the redemption date. |
| |
(3) | Unless redeemed in accordance with provision authorised by subsection (2), |
| |
the shares must be paid for on redemption. |
| |
700 | Financing of redemption |
| |
(1) | A private limited company may redeem redeemable shares out of capital in |
| 25 |
accordance with Chapter 5 of this Part. |
| |
(2) | Subject to that, redeemable shares in a limited company may only be redeemed |
| |
| |
(a) | distributable profits of the company, or |
| |
(b) | the proceeds of a fresh issue of shares made for the purposes of the |
| 30 |
| |
(3) | Any premium payable on redemption of shares in a limited company must be |
| |
paid out of distributable profits of the company, subject to the following |
| |
| |
(4) | If the redeemable shares were issued at a premium, any premium payable on |
| 35 |
their redemption may be paid out of the proceeds of a fresh issue of shares |
| |
made for the purposes of the redemption, up to an amount equal to— |
| |
(a) | the aggregate of the premiums received by the company on the issue of |
| |
| |
(b) | the current amount of the company’s share premium account |
| 40 |
(including any sum transferred to that account in respect of premiums |
| |
| |
| |
|
| |
|
| |
|
(5) | The amount of the company’s share premium account is reduced by a sum |
| |
corresponding (or by sums in the aggregate corresponding) to the amount of |
| |
any payment made under subsection (3). |
| |
(6) | This section is subject to section 748(4) (terms of redemption enforceable in a |
| |
| 5 |
701 | Redeemed shares treated as cancelled |
| |
Where shares in a limited company are redeemed— |
| |
(a) | the shares are treated as cancelled, and |
| |
(b) | the amount of the company’s issued share capital is diminished |
| |
accordingly by the nominal value of the shares redeemed. |
| 10 |
702 | Notice to registrar of redemption |
| |
(1) | If a limited company redeems any redeemable shares it must within one month |
| |
after doing so give notice to the registrar, specifying the shares redeemed. |
| |
(2) | The notice must be accompanied by a statement of capital. |
| |
(3) | The statement of capital must state with respect to the company’s share capital |
| 15 |
immediately following the redemption— |
| |
(a) | the total number of shares of the company, |
| |
(b) | the aggregate nominal value of those shares, |
| |
(c) | for each class of shares— |
| |
(i) | prescribed particulars of the rights attached to the shares, |
| 20 |
(ii) | the total number of shares of that class, and |
| |
(iii) | the aggregate nominal value of shares of that class, and |
| |
(d) | the amount paid up and the amount (if any) unpaid on each share |
| |
(whether on account of the nominal value of the share or by way of |
| |
| 25 |
(4) | If default is made in complying with this section, an offence is committed by— |
| |
| |
(b) | every officer of the company who is in default. |
| |
(5) | A person guilty of an offence under this section is liable on summary |
| |
conviction to a fine not exceeding level 3 on the standard scale and, for |
| 30 |
continued contravention, a daily default fine not exceeding one-tenth of level |
| |
| |
| |
| |
| 35 |
703 | Power of limited company to purchase own shares |
| |
(1) | A limited company having a share capital may purchase its own shares |
| |
(including any redeemable shares), subject to— |
| |
(a) | the following provisions of this Chapter, and |
| |
|
| |
|
| |
|
(b) | any restriction or prohibition in the company’s articles. |
| |
(2) | A limited company may not purchase its own shares if as a result of the |
| |
purchase there would no longer be any issued shares of the company other |
| |
than redeemable shares or shares held as treasury shares. |
| |
704 | Payment for purchase of own shares |
| 5 |
(1) | A limited company may not purchase its own shares unless they are fully paid. |
| |
(2) | Where a limited company purchases its own shares, the shares must be paid |
| |
| |
705 | Financing of purchase of own shares |
| |
(1) | A private limited company may purchase its own shares out of capital in |
| 10 |
accordance with Chapter 5 of this Part. |
| |
| |
(a) | a limited company may only purchase its own shares out of— |
| |
(i) | distributable profits of the company, or |
| |
(ii) | the proceeds of a fresh issue of shares made for the purpose of |
| 15 |
financing the purchase, and |
| |
(b) | any premium payable on the purchase by a limited company of its own |
| |
shares must be paid out of distributable profits of the company, subject |
| |
| |
(3) | If the shares to be purchased were issued at a premium, any premium payable |
| 20 |
on their purchase by the company may be paid out of the proceeds of a fresh |
| |
issue of shares made for the purpose of financing the purchase, up to an |
| |
| |
(a) | the aggregate of the premiums received by the company on the issue of |
| |
| 25 |
(b) | the current amount of the company’s share premium account |
| |
(including any sum transferred to that account in respect of premiums |
| |
| |
| |
(4) | The amount of the company’s share premium account is reduced by a sum |
| 30 |
corresponding (or by sums in the aggregate corresponding) to the amount of |
| |
any payment made under subsection (3). |
| |
(5) | This section has effect subject to section 748(4) (terms of purchase enforceable |
| |
| |
Authority for purchase of own shares |
| 35 |
706 | Authority for purchase of own shares |
| |
(1) | A limited company may only purchase its own shares— |
| |
(a) | by an off-market purchase, in pursuance of a contract approved in |
| |
advance in accordance with section 707; |
| |
(b) | by a market purchase, authorised in accordance with section 714. |
| 40 |
(2) | A purchase is “off-market” if the shares either— |
| |
|
| |
|
| |
|
(a) | are purchased otherwise than on a recognised investment exchange, or |
| |
(b) | are purchased on a recognised investment exchange but are not subject |
| |
to a marketing arrangement on the exchange. |
| |
(3) | For this purpose a company’s shares are subject to a marketing arrangement |
| |
on a recognised investment exchange if— |
| 5 |
(a) | they are listed under Part 6 of the Financial Services and Markets Act |
| |
| |
(b) | the company has been afforded facilities for dealings in the shares to |
| |
take place on the exchange— |
| |
(i) | without prior permission for individual transactions from the |
| 10 |
authority governing that investment exchange, and |
| |
(ii) | without limit as to the time during which those facilities are to |
| |
| |
(4) | A purchase is a “market purchase” if it is made on a recognised investment |
| |
exchange and is not an off-market purchase by virtue of subsection (2)(b). |
| 15 |
(5) | In this section “recognised investment exchange” means a recognised |
| |
investment exchange (within the meaning of Part 18 of the Financial Services |
| |
and Markets Act 2000) other than an overseas exchange (within the meaning of |
| |
| |
Authority for off-market purchase |
| 20 |
707 | Authority for off-market purchase |
| |
(1) | A company may only make an off-market purchase of its own shares in |
| |
pursuance of a contract approved in advance in accordance with this section. |
| |
| |
(a) | the terms of the proposed contract must be authorised by special |
| 25 |
resolution of the company before the contract is entered into, or |
| |
(b) | the purchase must be in pursuance of a contingent purchase contract |
| |
authorised by special resolution of the company before it was entered |
| |
| |
(3) | A “contingent purchase contract” means a contract, entered into by the |
| 30 |
company and relating to shares in the company, that does not amount to a |
| |
contract to purchase the shares but under which the company may (subject to |
| |
any conditions) become entitled or obliged to purchase the shares. |
| |
(4) | The authority conferred by a resolution under this section may be varied, |
| |
revoked or from time to time renewed by a special resolution of the company. |
| 35 |
(5) | In the case of a public company a resolution conferring, varying or renewing |
| |
authority must specify a date on which the authority is to expire, which must |
| |
not be later than 18 months after the date on which the resolution is passed. |
| |
(6) | A resolution conferring, varying, revoking or renewing authority under this |
| |
| 40 |
section 708 (exercise of voting rights), and |
| |
section 709 (disclosure of details of contract). |
| |
|
| |
|