Share buyback framework for public and private companies in the UK


Published by a UUÂãÁÄÖ±²¥ Corporate expert
Practice notes

Share buyback framework for public and private companies in the UK


Published by a UUÂãÁÄÖ±²¥ Corporate expert

Practice notes
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A limited company may buy back Shares in itself, if certain conditions set out in the Companies Act 2006 (CA 2006) are met. This is known as a Share Buyback or a purchase of own shares.

In addition to the provisions of CA 2006, there are other Rules and guidelines that are relevant to a listed company or an AIM company. In particular, a listed company must have regard to the Listing Rules (LRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must have regard to the AIM Rules for Companies (AIM Rules), but these do not specifically refer to share buybacks, so AIM Regulation has confirmed that compliance by an AIM company with the LRs in relation to share buybacks would represent best practice in most circumstances. An AIM company is also subject to DTR 5. In addition, both types of company may follow institutional investor guidance.

The restrictions in CA 2006 relating to share buybacks do not apply to unlimited companies. For further information on this type of company, see Practice Note: Unlimited

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United Kingdom
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Key definition:
Share buyback definition
What does Share buyback mean?

A purchase by a company of its own shares. Any acquisition of shares by a limited company must comply with part 18 of the Companies Act 2006. In addition, a listed company must comply with the Listing Rules and the Disclosure Guidance and Transparency Rules in relation to an own share purchase, while an alternative investment market (AIM) company must comply with the AIM Rules. Each may follow relevant institutional investor guidance.

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