chapter  1
16 Pages

Introduction

The existing statutory prohibition is, in general, removed for private companies by the Companies Act 2006. The 2006 Act retains the prohibition of financial assistance by a public company or by its subsidiaries for the purpose of acquiring the public company's shares. The scheme was challenged on the basis that Brady was providing financial assistance for the purchase of its own shares. If 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. This chapter deals with authority for a market purchase. Where the share capital of a company is divided into different classes, the aggregate nominal value of each class of shares held as treasury shares must not exceed 10 per cent of the nominal value of the relevant class. All companies may, subject to satisfying certain conditions, issue redeemable shares and may also purchase their own shares.