New and Updated Documents for Share Buybacks

May 2013
A large number of documents in our Share Capital and Profits folder have been updated, and many new documents have been added, to take account of recent changes to the regime by which private limited companies carry out share buybacks.

On 30th April 2013, Part 18 of the Companies Act 2006 was amended by Regulations. The changes make it easier for companies to buy back their own shares, particularly when the shares are being purchased for the purposes of or in connection with an employees’ share scheme.

As share buyback contracts can now be approved by an ordinary resolution of the shareholders, rather than by a special resolution, we have made appropriate amendments to our Board Resolutions, Written Resolutions and Minutes. Amendments have also been made to the Buyback Contracts and Letters to Companies House.

Companies may now authorise multiple buybacks in advance, rather than approving each individual contract, where the buybacks are for the purposes of or in connection with an employees’ share scheme (ESS). We have introduced new “ESS – Multiple Buyback” versions of our Board Resolutions, Written Resolutions, Minutes and Letters to Companies House.

The procedure for using capital to buy back shares is now different (and simpler) where the buyback is for the purposes of an ESS. Accordingly, we have introduced new “ESS” versions of our Board Resolutions, Written Resolutions, Minutes and Letters to Companies House for purchases out of capital. We have also added a Solvency Statement, Statement of Capital and other documents required under the new procedure.

Our Guidance Notes for purchases out of Profits and Capital respectively have been revised to reflect the April 2013 changes. The Guidance Notes take the reader through the share buyback process step by step, signposting the relevant documents in our Share Capital and Profits folder.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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