C2C1Part 18Acquisition by limited company of its own shares
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2
Chapter 3Redeemable shares
687Financing of redemption
1
A private limited company may redeem redeemable shares out of capital in accordance with Chapter 5.
2
Subject to that, redeemable shares in a limited company may only be redeemed out of—
a
distributable profits of the company, or
b
the proceeds of a fresh issue of shares made for the purposes of the redemption.
3
Any premium payable on redemption of shares in a limited company must be paid out of distributable profits of the company, subject to the following provision.
4
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.
5
The amount of the company's share premium account is reduced by a sum corresponding (or by sums in the aggregate corresponding) to the amount of any payment made under subsection (4).
6
This section is subject to section 735(4) (terms of redemption enforceable in a winding up).
Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))