Company could buy back your own shares. Your company can finance your buy back or redemption of your own shares out of your capital. In this circumstance, your director must pass a special resolution. However, your company can only do this provided there is no restriction or prohibition in your company’s articles of association.
In addition, your company directors must also make a statement about the solvency of your company immediately after the buy back and the subsequent year. All your company directors must sign the solvency statement.
Directors’ report and auditor’s report
Your company must make a copy of your solvency statement and your auditor’s report confirming your directors’ opinion and made available to your shareholders (members) at or before in the case of a written resolution. If your resolution is to be passed at a meeting, by making a copy of your directors’ statement and your auditor’s report available for inspection at that meeting.
Your company must also deliver a copy of your directors’ statement and your auditors report to Companies House. This must be done no later than the day on which your company first publish or give notice of your proposed payment out of capital.
For further information, you may refer to section 719 of the Companies Act 2006.
Apply to court to cancel
In the event, a shareholder or a creditor of your company who did not consent or vote in favour of your resolution can apply to the court to cancel your resolution. They can do it within five weeks of the passing of your resolution.
Consequently, the applicant to the court must complete the form SH16 and deliver it to Companies House immediately. When your company receives the notice of court application then you must notify Companies House using the form SH17. This must be done within 15 days of the making of a court order. Your company must also deliver a copy of the order to Companies House.
For further reading, you may refer to Parts 17 and 18 of the Companies Act 2006.
Your company must include the changes in your company’s shares capital in your Confirmation Statement.