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Using Profit: Repurchase of Shares

Repurchase of Shares

A purchase of own shares is when a company purchases shares in itself from an existing shareholder and the shares purchased are not redeemable shares. 

A company can purchase its shares:

- out of profits;
- out of the proceeds of a fresh/new issue of shares; or
- out of capital.

Due to the principle of the maintenance of share capital, there are very strict rules that companies must follow for the purchase or redemption of shares. More information and templates on the repurchase of shares are available here:

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