concise
Customer Login | Search This Site:   Go  

What we do Register a company Company accounts Abbreviated accounts Types of business taxes Person with Significant Control for Limited Company Paying staff and PAYE Apply VAT numbers Check VAT numbers Fixed fee accounts About us Careers
 
Latest UK Business News : Trade truths for May?s vision of a ?Global Britain?      UK housing stock value soars to a record £6.8tn      Pension penalty on grandparents       Consultant McKinsey agrees new London HQ      May warns UK will walk away from ?bad deal?      

Redemption or purchase of shares out of capital

 

If your company is a private limited company, your company can finance a purchase or redemption of shares out of capital by passing a special resolution. Your company can only do this provided there is no restriction or prohibition in your company’s articles of association.

If your company finances a purchase by a payment out of its capital, your company directors must also make a statement about the solvency of the company immediately after the purchase and in the following year. All your company directors must sign the solvency statement.

Your company must make a copy of the statement and auditor's report confirming the directors' opinion available to the shareholders (members) at or before the time your company deliver the resolution to them in the case of a written resolution. Or, if the resolution is to be passed at a meeting, by making a copy of the directors' statement and auditor's report available for inspection at that meeting.

Your company must also deliver a copy of the directors' statement and auditors report to Companies House no later than the day on which your company first publish or give notice of the proposed payment out of capital. Please refer to the section 719 of the Companies Act 2006 for the requirements for publishing and giving notice on this subject matter.
 
Any member of the company who did not consent or vote in favour of the resolution or any creditor of the company can apply to court to cancel the resolution, within five weeks of the passing of the resolution.

The applicants to court must complete and deliver Form SH16 to Companies House immediately. When your company receives notice of the application to court, your company must immediately notify Companies House on Form SH17 and, within 15 days of the making of a court order, your company must deliver a copy of the order to Companies House.

If you would like further information on share capital and its maintenance, you may refer to Parts 17 and 18 of the Companies Act 2006.

Concise Accountancy – Making company legal administration simple for businesses
 
Email This Page  Print This Page