The buyback of shares by a company can be an effective way of allowing a shareholder to leave without the other shareholders having to purchase the departing shareholder’s shares directly themselves.
The typical route is for the purchase of the shares to be made out of the company’s distributable profits, but it is also possible in certain circumstances to buy shares back out of capital.
Whichever route is chosen legislation provides rules which must be followed, the breach of which is a criminal offence and the transaction becomes void. Given the consequences of not following the correct procedure means that it is advisable to obtain legal advice.
We can help assess whether the buyback of shares is viable and produce the relevant legal documentation to ensure it is effected in a lawful manner