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Purchase of own shares

 

Your company may purchase its own shares if there is no restriction or prohibition in the articles of association and the approval of its shareholders is granted. However, your company is not allowed to purchase own shares if this would leave only redeemable shares in issue.

You must notify Companies House of the purchase using the Form SH03 within 28 days.

For Private and Public company

When your company purchases its own shares, the shares will be cancelled on their return. If your company is cancelling the shares immediately, the Form SH06 which includes a statement of capital must be delivered to Companies House.

For Public Company

However, if your company is a public company with qualifying share, your company may either cancel those shares immediately or hold them 'in treasury' for resale or transfer to an employees' shares scheme at a later date or cancel them at a later date.

Your company must notify the initial purchase of 'treasury' shares to Companies House on Form SH03 and if your company is cancelling those treasury shares immediately the form SH06 must be filed.

If your company sell or transfer the shares from treasury, your company must deliver Form SH04 and if your company subsequently cancels the shares, the Form SH05 which includes a statement of capital must be registered with Companies House.

Stamp Duty

A purchase of your company's own shares may be subject to stamp duty. If the consideration for the shares is above £1000, HM Revenue & Customs (HMRC) must stamp Form SH03 before it is delivered to Companies House, if the consideration is £1000 or less, your company need not send the form to be stamped, but your company must sign the certification on the form.

You may use a single Form SH03 to notify Companies House of purchases of shares on different dates and under different contracts.

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