repurchase of shares

repurchase of shares
Under Chapter VII of Part V of the Companies Act 1985, a company can repurchase its own shares whether or not they are redeemable. The procedure requires shareholder approval and the appropriate power in the Articles of Association. The price must be drawn from distributable profits although, as for redeemable shares, a procedure exists for payment to be made from capital. The payment is treated as a dividend for tax purposes unless it qualifies to be treated as a capital disposal, hence subject to CGT. The conditions apply to shares held for five years by a UK resident shareholder who satisfies the relevant requirements.

Easyform Glossary of Law Terms. — UK law terms.

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  • repurchase — Ⅰ. repurchase UK US /ˌriːˈpɜːtʃəs/ verb [T] FINANCE, STOCK MARKET ► to buy back shares, bonds, etc. that you previously sold: »Our objective is to use surplus cash to repurchase shares. Ⅱ. repurchase UK US /ˌriːˈpɜːtʃəs/ noun [C or U] also… …   Financial and business terms

  • repurchase agreement — ( RP) A form of secured, short term borrowing in which a security is sold with a simultaneous agreement to buy it back from the purchaser at a future date. The purchase and sales agreements are simultaneous but the transactions are not. The sale… …   Financial and business terms

  • repurchase — re·pur·chase 1 /ˌrē pər chəs/ vt chased, chas·ing: to buy back repurchase shares of stock repurchase 2 n: the act or an instance of purchasing something again or back; specif: a corporation s buying back of some of its stock at market price (as… …   Law dictionary

  • Repurchase agreement — Better known as Repurchase agreements (RPs or repos), a Sale and Repurchase Agreement has a borrower (seller/cash receiver) sell securities for cash to a lender (buyer/cash provider) and agree to repurchase those securities at a later date for… …   Wikipedia

  • Repurchase agreement — An agreement with a commitment by the seller ( dealer) to buy a security back from the purchaser ( customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short term loan, where the… …   Financial and business terms

  • repurchase offer issuer bid — Offer by issuing company to existing shareholders to repurchase the company s own shares or other securities convertible into shares. A repurchase offer may include the distribution of renounceable or non renounceable rights. The objective of… …   Financial and business terms

  • repurchase offer issuer bid — Offer by issuing company to existing shareholders to repurchase the company s own shares or other securities convertible into shares. A repurchase offer may include the distribution of renounceable or non renounceable rights. The objective of… …   Euroclear glossary

  • Share repurchase — In some countries, including the United States and the United Kingdom, corporations can buy back their own stock in a share repurchase, also known as a stock repurchase or share buyback. There has been a meteoric rise in the use of share… …   Wikipedia

  • Accelerated Share Repurchase - ASR — A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment… …   Investment dictionary

  • Share Repurchase — A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. Share repurchase is usually an indication that the company s management thinks the shares are undervalued. The company can buy… …   Investment dictionary

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