3 A company may not purchase its own shares

Trevor v Whitworth (1887) HL The memorandum of the company did not authorise the company to purchase its own shares but this was permitted by the articles of association. The appellant was the liquidator of the company and the respondent was the executor of a deceased shareholder who had sold his shares in the company to the company and was now claiming for full payment of the purchase price. Both the lower courts allowed the claim but it fell to the House of Lords to decide as a matter of law whether a limited company could purchase its own shares.