- Y Diweddaraf sydd Ar Gael (Diwygiedig)
- Pwynt Penodol mewn Amser (27/03/2006)
- Gwreiddiol (a wnaed Fel)
Version Superseded: 06/04/2007
Point in time view as at 27/03/2006.
There are currently no known outstanding effects for the The Companies (Northern Ireland) Order 1986 (revoked), Cross Heading: Redemption and purchase generally.
Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.
F22Order repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16 and the repeal being partly in force, as to which see individual Articles (with savings (with adaptations) by Companies Act 2006 (Commencement No. 6, Saving and Commencement Nos. 3 and 5 (Amendment)) Order 2008 (S.I. 2008/674), arts. 2(3), {4}, Sch. 2) and subject to amendments (6.4.2008) by Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1)(b)(2), Sch. 1 paras. 135, 147, 148 {Sch. 2 Note 1} (with arts. 6, 11, 12) and subject to amendments (6.4.2008) by S.R. 2008/133, {regs. 2, 3}
169 .F1—(1) Subject to the provisions of this Chapter, a company limited by shares or limited by guarantee and having a share capital may, if authorised to do so by its articles, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or the shareholder.
(2) No redeemable shares may be issued at a time when there are no issued shares of the company which are not redeemable.
(3) Redeemable shares may not be redeemed unless they are fully paid; and the terms of redemption must provide for payment on redemption.
F1mod. by 1989 NI 19
Prospective
F2Art 169A inserted (prosp.) by 1990 NI 10
170 .F3—(1) Subject to paragraph (2) and to Articles 181 (private companies redeeming or purchasing own shares out of capital) and 188(4) (terms of redemption or purchase enforceable in a winding up)—
(a)redeemable shares may only be redeemed out of distributable profits of the company or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; and
(b)any premium payable on redemption must be paid out of distributable profits of the company.
(2) If the redeemable shares were issued at a premium, any premium payable on 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 the shares redeemed, or
(b)the current amount of the company's share premium account (including any sum transferred to that account in respect of premiums on the new shares),
whichever is the less; and in that case the amount of the company's share premium account shall be reduced by a sum corresponding (or by sums in the aggregate corresponding) to the amount of any payment made by virtue of this paragraph out of the proceeds of the issue of the new shares.
F4(3) Subject to the following provisions of this Chapter, redemption of shares may be effected on such terms and in such manner as may be provided by the company's articles.
(4) SharesF5 redeemed under this Article shall be treated as cancelled on redemption, and the amount of the company's issued share capital shall be diminished by the nominal value of those shares accordingly; but the redemption of shares by a company is not to be taken as reducing the amount of the company's authorised share capital.
(5) Without prejudice to paragraph (4), where a company is about to redeem shares, it has power to issue shares up to the nominal value of the shares to be redeemed as if those shares had never been issued.
Art. 171 rep. by 1988 c. 39
172 .F6—(1) Subject to the following provisions of this Chapter, a company limited by shares or limited by guarantee and having a share capital may, if authorised to do so by its articles, purchase its own shares (including any redeemable shares).
[F7(2) Articles 169 and 170 apply to the purchase by a company under this Article of its own shares as they apply to the redemption of redeemable shares.
This is subject to paragraphs (2A) and (2B).
(2A) The terms and manner of a purchase under this Article need not be determined by the Articles as required by Article 170(3).
(2B) Where a company makes a purchase of qualifying shares out of distributable profits under this Article, Article 172A applies to the shares purchased and accordingly Article 170(4) does not apply to those shares.]
(3) A company may not under this Article purchase its own shares if as a result of the purchase there would no longer be any member of the company holding shares other than redeemable shares[F7 or shares held as treasury shares].
[F7(4) For the purposes of this Chapter “qualifying shares” are shares which—
(a)are included in the official list in accordance with the provisions of Part 6 of the Financial Services and Markets Act 2000,
(b)are traded on the market known as the Alternative Investment Market established under the rules of London Stock Exchange plc,
(c)are officially listed in an EEA State, or
(d)are traded on a market established in an EEA State which is a regulated market for the purposes of Article 16 of Council Directive 93/22/EEC on investment services in the securities field,
and in sub-paragraph (a) “the official list” has the meaning given in section 103(1) of the Financial Services and Markets Act 2000.]
F6mod. by 1989 NI 19
F7SR 2004/275
172A.—(1) Where qualifying shares are purchased by a company out of distributable profits in accordance with Article 172, the company may—
(a)hold the shares (or any of them), or
(b)deal with any of them, at any time, in accordance with Article 172D.
(2) Where shares are held under paragraph (1)(a) then, for the purposes of Article 360, the company must be entered in the register as the member holding those shares.
(3) In this Order, references to a company holding shares as treasury shares are references to the company holding shares which—
(a)were (or are treated as having been) purchased by it in circumstances in which this Article applies, and
(b)have been held by the company continuously since they were so purchased.
172B.—(1) Where a company has shares of only one class, the aggregate nominal value of shares held as treasury shares must not at any time exceed 10 per cent of the nominal value of the issued share capital of the company at that time.
(2) Where the share capital of a company is divided into shares of different classes, the aggregate nominal value of the shares of any class held as treasury shares must not at any time exceed 10 per cent of the nominal value of the issued share capital of the shares in that class at that time.
(3) Where paragraph (1) or (2) is contravened by a company, the company must dispose of or cancel the excess shares, in accordance with Article 172D, before the end of the period of 12 months beginning with the day on which that contravention occurs.
For this purpose “the excess shares” means such number of the shares, held by the company as treasury shares at the time in question, as resulted in the limit being exceeded.
172C.—(1) This Article applies to shares which are held by a company as treasury shares ( “the treasury shares”).
(2) The company must not exercise any right in respect of the treasury shares and any purported exercise of such a right is void.
(3) The rights to which paragraph (2) applies include any right to attend or vote at meetings (including meetings under Article 418).
(4) No dividend may be paid, and no other distribution (whether in cash or otherwise) of the company's assets (including any distribution of assets to members on a winding up) may be made, to the company in respect of the treasury shares.
(5) Nothing in this Article is to be taken as preventing—
(a)an allotment of shares as fully paid bonus shares in respect of the treasury shares, or
(b)the payment of any amount payable on the redemption of the treasury shares (if they are redeemable shares).
(6) Any shares allotted as fully paid bonus shares in respect of the treasury shares shall be treated for the purposes of this Order as if they were purchased by the company at the time they were allotted, in circumstances in which Article 172A(1) applied.
172D.—(1) Where shares are held as treasury shares, a company may at any time—
(a)sell the shares (or any of them) for cash,
(b)transfer the shares (or any of them) for the purposes of or pursuant to an employees' share scheme, or
(c)cancel the shares (or any of them).
(2) For the purposes of paragraph (1)(a), “cash”, in relation to a sale of shares by a company, means—
(a)cash (including foreign currency) received by the company, or
(b)a cheque received by the company in good faith which the directors have no reason for suspecting will not be paid, or
(c)a release of a liability of the company for a liquidated sum, or
(d)an undertaking to pay cash to the company on or before a date not more than 90 days after the date on which the company agrees to sell the shares.
(3) But if the company receives a notice under Article 422 (right of offeror to buy out minority shareholders)[7] that a person desires to acquire any of the shares, the company must not, under paragraph (1), sell or transfer the shares to which the notice relates except to that person.
(4) If under paragraph (1) the company cancels shares held as treasury shares, the company must diminish the amount of the issued share capital by the nominal value of the shares cancelled; but the cancellation is not to be taken as reducing the amount of the company's authorised share capital.
(5) The directors may take such steps as are requisite to enable the company to cancel its shares under paragraph (1) without complying with Articles 145 and 146 (special resolution for reduction of share capital; application to court for order of confirmation).
172E.—(1) If shares held as treasury shares cease to be qualifying shares, the company must forthwith cancel the shares in accordance with Article 172D.
(2) For the purposes of paragraph (1), shares are not to be regarded as ceasing to be qualifying shares by virtue only of—
(a)the suspension of their listing in accordance with the applicable rules in the EEA State in which the shares are officially listed, or
(b)the suspension of their trading in accordance with—
(i)in the case of shares traded on the market known as the Alternative Investment Market, the rules of London Stock Exchange plc, and
(ii)in any other case, the rules of the regulated market on which they are traded.
(3) For the purposes of this Article “regulated market” means a market which is a regulated market for the purposes of Article 16 of Council Directive 93/22/EEC on investment services in the securities field.
172F.—(1) Where shares held as treasury shares are sold, the proceeds of sale shall be dealt with in accordance with this Article.
(2) Where the proceeds of sale are equal to or less than the purchase price paid by the company for the shares, the proceeds shall be treated for the purposes of Part IX as a realised profit of the company.
(3) Where the proceeds of sale exceed the purchase price paid by the company for the shares—
(a)that part of the proceeds of sale that is equal to the purchase price paid shall be treated for the purposes of Part IX as a realised profit of the company, and
(b)a sum equal to the excess shall be transferred to the company's share premium account.
(4) The purchase price paid by the company for the shares shall be determined by the application of a weighted average price method.
(5) Where the shares were allotted to the company as fully paid bonus shares, the purchase price paid for them shall, for the purposes of paragraph (4), be treated as being nil.
172G. If a company contravenes any provision of Articles 172A to 172F every officer of it who is in default is liable to a fine.
173 .F8—(1) A purchase by a company of its own shares is “off-market” if the shares either—
(a)are purchased otherwise than on[F9 a recognised investment exchange], or
(b)are purchased on[F9 a recognised investment exchange] but are not subject to a marketing arrangement on[F9 that investment exchange].
(2) For this purpose, a company's shares are subject to a marketing arrangement on[F9 a recognised investment exchange] if either—
(a)they are listed[F9 under[F10 Part 6 of the Financial Services and Markets Act 2000]]; or
(b)the company has been afforded facilities for dealings in those shares to take place on[F9 that investment exchange] without prior permission for individual transactions from the authority governing[F9 that investment exchange] and without limit as to the time during which those facilities are to be available.
(3) A purchase by a company of its own shares is a “market” purchase if it is a purchase made on[F9 a recognised investment exchange], other than a purchase which is an off-market purchase by virtue of paragraph (1)(b).
[F10(4) “Recognised investment exchange” means a recognised investment exchange other than an overseas investment exchange.
(5) Expressions used in the definition contained in paragraph (4) have the same meaning as in Part 18 of the Financial Services and Markets Act 2000.]
174 .F11—(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 Article or Article 175.
(2) The terms of the proposed contract must be authorised by a special resolution of the company before the contract is entered into; and the following paragraphs apply with respect to that authority and to resolutions conferring it.
(3) Subject to paragraph (4), the authority may be varied, revoked or from time to time renewed by special resolution of the company.
(4) In the case of a public company the authority conferred by the resolution must specify a date on which the authority is to expire; and in a resolution conferring or renewing authority that date must not be later than 18 months after that on which the resolution is passed.
(5) A special resolution to confer, vary, revoke or renew authority is not effective if any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares in voting on the resolution and the resolution would not have been passed if he had not done so.
For this purpose—
a member who holds shares to which the resolution relates is regarded as exercising the voting rights carried by those shares not only if he votes in respect of them on a poll on the question whether the resolution shall be passed, but also if he votes on the resolution otherwise than on a poll;
notwithstanding anything in the company's articles, any member of the company may demand a poll on that question; and
a vote and a demand for a poll by a person as proxy for a member are the same respectively as a vote and a demand by the member.
(6) Such a resolution is not effective for the purposes of this Article unless (if the proposed contract is in writing) a copy of the contract or (if not) a written memorandum of its terms is available for inspection by members of the company both—
(a)at the company's registered office for not less than 15 days ending with the date of the meeting at which the resolution is passed, and
(b)at the meeting itself.
A memorandum of contract terms so made available must include the names of any members holding shares to which the contract relates; and a copy of the contract so made available must have annexed to it a written memorandum specifying any such names which do not appear in the contract itself.
(7) A company may agree to a variation of an existing contract so approved, but only if the variation is authorised by a special resolution of the company before it is agreed to; and paragraphs (3) to (6) apply to the authority for a proposed variation as they apply to the authority for a proposed contract, save that a copy of the original contract or (as the case may require) a memorandum of its terms, together with any variations previously made, must also be available for inspection in accordance with paragraph (6).
F11mod. by 1989 NI 19
175 .F12—(1) A contingent purchase contract is a contract entered into by a company and relating to any of its shares—
(a)which does not amount to a contract to purchase those shares, but
(b)under which the company may (subject to any conditions) become entitled or obliged to purchase those shares.
(2) A company may only make a purchase of its own shares in pursuance of a contingent purchase contract if the contract is approved in advance by a special resolution of the company before the contract is entered into; and paragraphs (3) to (7) of Article 174 apply to the contract and its terms.
F12mod. by 1989 NI 19
176 .F13—(1) A company shall not make a market purchase of its own shares unless the purchase has first been authorised by the company in general meeting.
(2) That authority—
(a)may be general for that purpose, or limited to the purchase of shares of any particular class or description, and
(b)may be unconditional or subject to conditions.
(3) The authority must—
(a)specify the maximum number of shares authorised to be acquired,
(b)determine both the maximum and the minimum prices which may be paid for the shares, and
(c)specify a date on which it is to expire.
(4) The authority may be varied, revoked or from time to time renewed by the company in general meeting, but this is subject to paragraph (3); and in a resolution to confer or renew authority, the date on which the authority is to expire must not be later than 18 months after that on which the resolution is passed.
(5) A company may under this Article make a purchase of its own shares after the expiry of the time limit imposed to comply with paragraph (3)(c), if the contract of purchase was concluded before the authority expired and the terms of the authority permitted the company to make a contract of purchase which would or might be executed wholly or partly after its expiration.
(6) A resolution to confer or vary authority under this Article may determine either or both the maximum and minimum prices for purchase by—
(a)specifying a particular sum, or
(b)providing a basis or formula for calculating the amount of the price in question without reference to any person's discretion or opinion.
(7) A resolution of a company conferring, varying, revoking or renewing authority under this Article is subject to Article 388 (copy of resolution to be sent to registrar within 15 days).
F13mod. by 1989 NI 19
177 .F14—(1) The rights of a company under a contract approved under Article 174 or 175, or under a contract for a purchase authorised under Article 176, are not capable of being assigned.
(2) An agreement by a company to release its rights under a contract approved under Article 174 or 175 is void unless the terms of the release agreement are approved in advance by a special resolution of the company before the agreement is entered into; and paragraphs (3) to (7) of Article 174 apply to approval for a proposed release agreement as to authority for a proposed variation of an existing contract.
F14mod. by 1989 NI 19
178 .F15—(1) A payment made by a company in consideration of—
(a)acquiring any right with respect to the purchase of its own shares in pursuance of a contract approved under Article 175, or
(b)the variation of a contract approved under Article 174 or 175, or
(c)the release of any of the company's obligations with respect to the purchase of any of its own shares under a contract approved under Article 174 or 175 or under a contract for a purchase authorised under Article 176,
must be made out of the company's distributable profits.
(2) If the requirements of paragraph (1) are not satisfied in relation to a contract—
(a)in a case within paragraph (1)(a), no purchase by the company of its own shares in pursuance of that contract is lawful under this Chapter,
(b)in a case within paragraph (1)(b), no such purchase following the variation is lawful under this Chapter, and
(c)in a case within paragraph (1)(c), the purported release is void.
F15mod. by 1989 NI 19
179 .F16—(1) Within the period of 28 days beginning with the date on which any shares purchased by a company under this Chapter are delivered to it, the company shall deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class purchased the number and nominal value of those shares and the date on which they were delivered to the company.
[F17(1A) But in the case of a company which has purchased its own shares in circumstances in which Article 172A applies, the requirement to deliver a return under paragraph (1) shall apply only where some or all of the shares have been cancelled forthwith after the date of their delivery in accordance with Article 172D(1) and in those circumstances the particulars required by that paragraph to be stated with respect to the shares purchased shall apply only to such of the shares as have been so cancelled.
(1B) Where a company has purchased its own shares in circumstances in which Article 172A applies, the company shall within the period of 28 days beginning with the date on which such shares are delivered to it (except where all of the shares have been cancelled forthwith after the date of their delivery in the circumstances referred to in paragraph (1A)) deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class purchased (other than any shares which have been cancelled in the circumstances referred to in paragraph (1A)) the number and nominal value of each of those shares which are held as treasury shares and the date on which they were delivered to the company.]
(2) In the case of a public company,[F17 any return under paragraph (1) or (1B)] shall also state—
(a)the aggregate amount paid by the company for the shares; and
(b)the maximum and minimum prices paid in respect of shares of each class purchased.
(3) Particulars of shares delivered to the company on different dates and under different contracts may be included in a single return[F17 under either paragraph (1) or (1B)] to the registrar; and in such a case the amount required to be stated under paragraph (2)(a) is the aggregate amount paid by the company for all the shares to which the return relates.
(4) Where a company enters into a contract approved under Article 174 or 175, or a contract for a purchase authorised under Article 176, the company shall keep at its registered office—
(a)if the contract is in writing, a copy of it; and
(b)if not, a memorandum of its terms,
from the conclusion of the contract until the end of the period of 10 years beginning with the date on which the purchase of all the shares in pursuance of the contract is completed or (as the case may be) the date on which the contract otherwise determines.
(5) Every copy and memorandum so required to be kept shallF18. . . be open to inspection without charge—
(a)by any member of the company, and
(b)if it is a public company, by any other person.
(6) If default is made in delivering to the registrar any return required by this Article, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine.
(7) If default is made in complying with paragraph (4), or if an inspection required under paragraph (5) is refused, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
(8) In the case of a refusal of an inspection required under paragraph (5) of a copy or memorandum, the court may by order compel an immediate inspection of it.
(9) The obligation of a company under paragraph (4) to keep a copy of any contract or (as the case may be) a memorandum of its terms applies to any variation of the contract so long as it applies to the contract.
179A.—(1) Paragraph (2) applies in relation to any shares held by a company as treasury shares if—
(a)the company is or was required to make a return under Article 179(1B) in relation to the shares, and
(b)the shares have—
(i)been cancelled in accordance with Article 172D(1), or
(ii)been sold or transferred for the purposes of or pursuant to an employees' share scheme under Article 172D(1).
(2) Within the period of 28 days beginning with the date on which such shares are cancelled or disposed of, the company shall deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class cancelled or disposed of—
(a)the number and nominal value of those shares, and
(b)the date on which they were cancelled or disposed of.
(3) Particulars of shares cancelled or disposed of on different dates may be included in a single return to the registrar.
(4) If default is made in delivering to the registrar any return required by this Article, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine.]
F19SR 2004/275
180 .F20—(1) Where under this Chapter shares of a company are redeemed or purchased wholly out of the company's profits, the amount by which the company's issued share capital is diminished in accordance with Article 170(4) on cancellation of the shares redeemed or purchased[F21, or in accordance with Article 172D(4) on cancellation of shares held as treasury shares,] shall be transferred to a reserve, called “the capital redemption reserve”.
(2) If the shares are redeemed or purchased wholly or partly out of the proceeds of a fresh issue and the aggregate amount of those proceeds is less than the aggregate nominal value of the shares redeemed or purchased, the amount of the difference shall be transferred to the capital redemption reserve.
(3) But paragraph (2) does not apply if the proceeds of the fresh issue are applied by the company in making a redemption or purchase of its own shares in addition to a payment out of capital under Article 181.
(4) The provisions of this Order relating to the reduction of a company's share capital apply as if the capital redemption reserve were paid-up share capital of the company, except that the reserve may be applied by the company in paying up its unissued shares to be allotted to members of the company as fully paid bonus shares.
F20mod. by 1989 NI 19
F21SR 2004/275
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