Sale of treasury shares

Published by a ��Ƶ Corporate expert

Practice notes

Sale of treasury shares

Published by a ��Ƶ Corporate expert

Practice notes

A limited company may hold, or deal with, Shares in itself, if certain conditions set out in the Companies Act 2006 (CA 2006) are met. Those shares are held in treasury and referred to as the company’s Treasury shares.

For information as to how, and why, a company may buy back its shares to hold in treasury, see Practice Note: Buying back shares into treasury.

The treasury shares regime is set out in CA 2006, ss 724–732. If a company contravenes any of these provisions (except CA 2006, s 730, see Practice Note: Cancellation of treasury shares), an offence is committed by the company and every officer of the company who is in default.

A person guilty of such an offence is liable, on conviction, to a fine.

Dealing with treasury shares

A company can simply hold its treasury shares (see Practice Note: Holding treasury shares). However, if it does not wish to do so, it can:

•
sell them for cash consideration
•
transfer them for the purposes of, or pursuant to, an employees' share scheme (see Practice

Jurisdiction(s):

United Kingdom

Key definition:

Treasury shares definition

What does Treasury shares mean?

A limited company may hold, or deal with, shares in itself, if certain conditions set out in CA 2006, ss 724–729 are met. Those shares are held in treasury and referred to as the company's treasury shares.

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