Who has the right to buy back company shares?
- Under Section 127 of the Companies Act 2016
- Only a Public Listed Company may purchase or hold its own shares
- Shares repurchased by the company are known as: Treasury Shares
What Are the Requirements for a Share Buy-Back?
Constitution
- The company's Constitution must expressly allow the company to buy back its own shares
Shareholders' Approval
- The company must obtain shareholders' approval at a General Meeting
- Before carrying out the share buy-back
Solvency
- The company must satisfy the solvency requirement
- The share buy-back must not adversely affect the company's financial position or ability to pay its debts
Through the Stock Exchange
- The share buy-back must be conducted through the Stock Exchange
- In accordance with the applicable listing requirements
Good Faith
- The share buy-back must be carried out in Good Faith
- And in the best interests of the company and its shareholders
Summary
- Only Public Listed Companies are allowed to buy back their own shares
- A share buy-back must comply with the Companies Act 2016 and the required procedures
- The process should protect the interests of both the company and its shareholders