Companies Act 1989

133 Issue of redeemable shares

(1) In Part V of the [1985 c. 6.] Companies Act 1985 (share capital, its increase, maintenance and reduction), Chapter III (redeemable shares, purchase by a company of its own shares) is amended as follows.

(2) After section 159 (power to issue redeemable shares) insert—

“159A Terms and manner of redemption

(1) Redeemable shares may not be issued unless the following conditions are satisfied as regards the terms and manner of redemption.

(2) The date on or by which, or dates between which, the shares are to be or may be redeemed must be specified in the company’s articles or, if the articles so provide, fixed by the directors, and in the latter case the date or dates must be fixed before the shares are issued.

(3) Any other circumstances in which the shares are to be or may be redeemed must be specified in the company’s articles.

(4) The amount payable on redemption must be specified in, or determined in accordance with, the company’s articles, and in the latter case the articles must not provide for the amount to be determined by reference to any person’s discretion or opinion.

(5) Any other terms and conditions of redemption shall be specified in the company’s articles.

(6) Nothing in this section shall be construed as requiring a company to provide in its articles for any matter for which provision is made by this Act.”.

(3) In section 160 (financing, &c. of redemption)—

(a) omit subsection (3) (which is superseded by the new section 159A), and

(b) in subsection (4) (cancellation of shares on redemption) for “redeemed under this section” substitute “redeemed under this Chapter”.

(4) In section 162 (power of company to purchase own shares), for subsection (2) (application of provisions relating to redeemable shares) substitute—

“(2) Sections 159, 160 and 161 apply to the purchase by a company under this section of its own shares as they apply to the redemption of redeemable shares.”.