Legal Advice & Compliance Guide
Company Share Buybacks
While Attwells Solicitors are well known for our expertise in property law, we also have a strong reputation in corporate and commercial law. Our experienced corporate solicitors provide specialist legal advice to shareholders and business partners, including support with buying and selling shares, share buybacks, and restructuring arrangements.
Company Share Buybacks: Legal Guidance & Compliance Support
Considering a Share Buyback? A company share buyback is often used to facilitate the exit of a shareholder—typically due to retirement, restructuring, or personal reasons. This process allows a private limited company to repurchase its own shares, but it must be carefully executed in accordance with UK company law.
At Attwells Solicitors, we have extensive experience advising businesses on all legal and procedural aspects of share buybacks. Our dedicated Company Share Buybacks service outlines the essential steps, legal requirements, and potential pitfalls you should be aware of before proceeding.
What Is a Share Buyback?
A share buyback, also known as a share repurchase, occurs when a company buys back its own shares from one or more shareholders. This can be part of an exit strategy for a shareholder or used as a means of restructuring ownership.
How long does a Share Buybacks take?
A company share buyback typically takes between 2 to 6 weeks, depending on the complexity of the transaction. The process involves reviewing the company’s Articles of Association, agreeing on share valuation, preparing legal documentation, and obtaining necessary board and shareholder approvals.
Once approved, the buyback is executed, payment is made, and post-completion filings are submitted to Companies House. Timelines may vary if the company’s Articles need amending or if there are tax or regulatory issues to address. Attwells Solicitors can manage the process efficiently to ensure full legal compliance.
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Legal Requirements for Share Buybacks
To undertake a share buyback, a private limited company must comply with the provisions set out in the Companies Act 2006. Failing to follow the correct procedure can have serious consequences:
- The buyback may be deemed void.
- Company directors and officers could be found personally liable.
- Offences under the Act can lead to unlimited fines, imprisonment of up to two years, or both.
Therefore, it is essential that the legal process is understood and followed precisely.
Are Share Buybacks Allowed in Your Company?
Under the Companies Act 2006, any limited company can buy back its own shares—even if this is not specifically stated in the Articles of Association. However, if your company’s articles explicitly prohibit share buybacks, the Articles of Association must be amended before the transaction can proceed. We can assist with reviewing your company’s governing documents and making any necessary amendments to ensure compliance.
Ready to Proceed with a Share Buyback?
If you’re considering a share buyback for your company, it’s crucial to get expert legal advice. Our team at Attwells Solicitors is here to guide you through every step of the process, from reviewing your Articles to completing the buyback in full legal compliance.
