The Department for Business, Innovation and Skills has launched a consultation on employee ownership and share buybacks.
This follows the the Nuttall Review in July this year which recommended that the Government review the provisions in the Companies Act 2006 that deal with share buybacks with a view to simplifying them.
In particular, the Government is seeking views on:
- A proposal that a private company be allowed to arrange share buybacks by way of an ordinary resolution thereby bringing the legal requirements for off market purchases in line with those for on market purchases;
- A proposal that a company seeking to buy back shares may pay for such shares in instalments rather than in full on purchase
- Whether the current provisions relating to the funding of a share buyback are too restrictive, and
- A proposal that the provisions for treasury shares (shares that were previously (or are treated as having been) purchased back from shareholders by the company) which currently apply to public companies be extended to private companies.
The consultation closes on 16 November 2012.
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