Acquiring Own Shares
Companies may also purchase their own shares, adhering to specific conditions. Approval by special resolution and compliance with procedural safeguards, including the retention of purchase contracts for inspection, are mandatory. Treasury shares, if retained, are non-voting and do not earn dividends but can be reissued or cancelled.
Subsidiaries may acquire shares in their holding company under similar conditions. Such acquisitions must be funded by distributable profits, with restrictions on voting rights and financial reporting. Directors may face personal liability for acquisitions made shortly before insolvency, unless they acted in the company’s best interests.
These provisions, while permitting flexibility in capital management, aim to balance shareholder rights, creditor protection, and transparency in corporate actions involving share repurchases and redemptions.
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