Can a company buy its own shares?
By virtue of Sec 160 Companies and Allied Matters Act 2004, A company is not allowed to buy shares issued by it unless in the following circumstances or events;
- If the company is settling or compromising a debt or claim asserted by or against the company.
- If the company is eliminating fractional shares
- If the company is fulfilling the terms of a non-assignable agreement under which the company is obliged to purchase shares owned by an officer of the company
- If the company is satisfying the claim of a dissenting shareholder
- If the company is complying with a court order.
Conditions for purchase;
- The shares shall only be purchased out of the profits of the company or the proceeds of a fresh issue of shares made for the purpose of the purchase
- Redeemable shares shall not be purchased at a price higher than the lowest price at which they are redeemable.
Team 618bees
For Further inquiries;
info.618bees.com
012803791
The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.