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If your company is considering buying back shares from members, it is vital you seek expert legal advice as generally it is forbidden and they can only be bought back under specific circumstances.
To get a clear direction on how best to proceed, our expert commercial team can offer you a free initial no obligation discussion. Getting one of our experts on board from an early stage often results in a better outcome for you and your business, so get in contact today.
Below you will find some background information on the legal facts surrounding this area of the law, to help you get an idea of your options.
- A company can buy back shares from its members provided certain conditions laid down in the Companies Act are met. The ability of the company to buy back its shares can be useful in a variety of situations including when:
- The majority of shareholders want to buy out a dissenting member;
- A member wants to leave;
- A shareholder dies and the other members do not want to increase their own shareholding or to take in a new member;
- Redeeming redeemable shares;
- A company has accumulated more capital that it needs and would like to return some to its shareholders
- There are important legal and taxation implications stemming from a buy back as well as various procedural requirements to be met and professional advice is vital before embarking on such a course.