Own Share Purchase Out Of Profits/New Share Issue/Cash – Board Minutes and Resolution (ESS)

Companies may wish to "buy back" or purchase their own shares.

This Own Share Purchase Out of Profits/New Share Issue/Cash – Board Minutes and Resolution (ESS) reflects one of the April 2013 changes to the Companies Act 2006. With effect from 30 April 2013, companies can by ordinary resolution authorise multiple buybacks of their own shares, where the buybacks are for the purposes of an employees’ share scheme.

This Board Minutes and Resolution (ESS) records the directors’ decision that the shareholders should be asked to consider and if appropriate pass a draft resolution to authorise multiple buybacks of shares. The document should be used in conjunction with the "Own Share Purchase Out of Profits/New Share Issue/Cash – Guidance Notes."

The Board Minutes and Resolution (ESS) is in open format. The document contains fields which must be completed. It also contains wording options in square brackets which must be adjusted to suit your purposes.

The authority given by the shareholders’ ordinary resolution may be general or limited to the purchase of shares of a particular class or description. It may be an unconditional authority or subject to conditions.

The authority must specify the maximum number of shares authorised to be acquired and determine both the maximum and minimum prices that may be paid for the shares. This can be done by specifying a particular sum or by providing a basis or formula for calculating the amount of the price (but without reference to any person’s discretion or opinion).

The authority may be varied, revoked or from time to time renewed by a resolution of the company. A resolution conferring, varying or renewing authority must specify a date on which it is to expire, which must not be later than five years after the date on which the resolution is passed.

The wording of the draft shareholders’ resolution must be consistent with the wording of either "Own Share Purchase Out of Profits/New Share Issue/Cash – Written Resolution (ESS)" or "Own Share Purchase Out of Profits/New Share Issue/Cash – Minutes (ESS)" which will be used if the shareholders’ resolution is to be passed as a written resolution or in a general meeting of the shareholders respectively.

If the company has only one director, then paragraphs 1 to 3 and paragraph 8 can be deleted together with references to "the chairman". Similarly, any references to the "Company Secretary" should be deleted if the company does not have one and the field should be completed with the name of the director responsible for secretarial duties.

Paragraphs 5, 6 and 7 should be amended depending on whether a written resolution or a general meeting is to be used to pass the resolution and they must be consistent with each other.

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