Can a company buy its own shares?

Can a company buy its own shares?

March 26, 2019

 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;

  1. If the company is settling or compromising a debt or claim asserted by or against the company.
  2. If the company is eliminating fractional shares
  3. 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
  4. If the company is satisfying the claim of a dissenting shareholder
  5. 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;

Email: hello@618bees.com

Call: 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.

 

 

 

 

 

 

 

                                      

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.
  • What’s the difference between a business name and an LLC?

    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 
  • What is an execution clause in a contract?

    This is the section in which the parties sign the contract or agreement.
  • What is SON?

    SON stands for ‘Standards Organization of Nigeria’
  • What is personal data?

    This is any information that can be used to identify an identifiable human person such passport photograph.
  • When registered, how long does a patent last for?

    Once granted, a patent is valid for 20 years.
  • What are the product categories available when registering with NAFDAC?

    The product categories include: Food, Cosmetics, Drug, Medical Device, Agro-Chemicals & Pesticide, Veterinary Products, Vaccines & Biologicals, Herbal and Nutraceuticals and Water
  • What is share capital?

    The share capital in a private limited company is the amount of money invested by its owners in exchange for shares of ownership.
  • Can I trademark my logo and name separately? Why is this a good idea?

    Yes you can. The advantage is that it gives you the opportunity to have more than one logo or the opportunity to change your logo easily as opposed to registering the name and the logo as one trademark.
All FAQs
Call Us Now on +234 901 719 0079 Chat on WhatsApp