Companies Act 2006

Authority for purchase of own shares U.K.

693 Authority for purchase of own shares U.K.

(1) A limited company may only purchase its own shares—

(a) by an off-market purchase, [F1 authorised in accordance with section 693A or] in pursuance of a contract approved in advance in accordance with section 694;

(b) by a market purchase, authorised in accordance with section 701.

(2) A purchase is “off-market” if the shares either—

(a) are purchased otherwise than on a recognised investment exchange, or

(b) are purchased on a recognised investment exchange but are not subject to a marketing arrangement on the exchange.

(3) For this purpose a company's shares are subject to a marketing arrangement on a recognised investment exchange if—

(a) they are listed under Part 6 of the Financial Services and Markets Act 2000 (c. 8), or

(b) the company has been afforded facilities for dealings in the shares to take place on the exchange—

(i) without prior permission for individual transactions from the authority governing that investment exchange, and

(ii) without limit as to the time during which those facilities are to be available.

(4) A purchase is a “market purchase” if it is made on a recognised investment exchange and is not an off-market purchase by virtue of subsection (2)(b).

(5) In this section “recognised investment exchange” means a recognised investment exchange (within the meaning of Part 18 of the Financial Services and Markets Act 2000) other than an overseas exchange (within the meaning of that Part).

Textual Amendments

F1 Words in s. 693(1) inserted (30.4.2013) by The Companies Act 2006 (Amendment of Part 18) Regulations 2013 (S.I. 2013/999), reg. 6

[F2 693A Authority for off-market purchase for the purposes of or pursuant to an employees' share scheme U.K.

(1) A company may make an off-market purchase of its own shares for the purposes of or pursuant to an employees' share scheme if the purchase has first been authorised by a resolution of the company under this section.

(2) That authority—

(a) may be general or limited to the purchase of shares of a 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, and

(b) determine both the maximum and minimum prices that may be paid for the shares.

(4) The authority may be varied, revoked or from time to time renewed by a resolution of the company.

(5) A resolution conferring, varying or renewing authority must specify a date on which it is to expire, which must not be later than five years after the date on which the resolution is passed.

(6) A company may make a purchase of its own shares after the expiry of the time limit specified if—

(a) the contract of purchase was concluded before the authority expired, and

(b) the terms of the authority permitted the company to make a contract of purchase that would or might be executed wholly or partly after its expiration.

(7) A resolution to confer or vary authority under this section may determine the maximum or minimum price for purchase by—

(a) specifying a particular sum, or

(b) providing a basis or formula for calculating the amount of the price (but without reference to any person's discretion or opinion).

(8) Chapter 3 of Part 3 (resolutions affecting a company's constitution) applies to a resolution under this section.]

Textual Amendments

F2 S. 693A inserted (30.4.2013) by The Companies Act 2006 (Amendment of Part 18) Regulations 2013 (S.I. 2013/999), reg. 7