Share buyback

Share buyback

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My employer is doing a buyback of my 6% shareholding.. The chairman tells me they are trying to do it as quickly as possible, but it will take at least 3 months. Is this correct, or can a buyback be done more quickly? Will things change on 1.10.08 when the new buyback company law rules come in?
ghd

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By User deleted
10th Sep 2008 18:45

Distribution basis is compulsory, due to short period of ownership.

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By User deleted
10th Sep 2008 13:38

Tax clearance?
The question does not mention whether or not a tax clearance treating the buyback consideration as capital is wanted, is available or is to be sought. This could have a material impact of the required time.

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By MBK
01st Sep 2008 12:47

The time is excessive
There are two ways of doing a share buy back - out of retained profit or out of capital.

If out of retained profit (I would guess this would be the case with a 6% shareholding) then it is theoretically possible to do it on a "same day" basis, provided all other shareholders are available to sign papers. But, allowing for drafting etc, I would have thought 3 weeks was reasonable.

If out of capital then the minimum period is 5 weeks - so say 2 months allowing for drafting etc.

The part of the new Companies Act dealing with share buybacks does not come into force until October 2009 - and there is virtually no change anyway. The bit I think you may be thinking of this October are the capital reduction provisions - which will be of no relevance or use to you.

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