Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Share buyback definition

What does Share buyback mean? A share buyback is a company purchasing its own issued shares, typically to return surplus cash, manage capital structure or satisfy employee share schemes. The statutory concept in UK company law is a “purchase of own shares”; “share buyback” is the common transactional term. In England & Wales, Scotland and Northern Ireland, buybacks by a limited company are governed by Part 18 of the Companies Act 2006. Key features include: shareholder authority (ordinary resolution for market purchases; special resolution approving the contract for off‑market purchases); funding only from distributable profits or the proceeds of a fresh issue (with...

Share buybacks under the Companies Act 2006: varying, revoking and renewing authorities; varying contracts and releasing rights (off-market, on-market and employees' scheme buybacks)

Published by a LexisNexis Corporate expert

Practice notes

A limited company is permitted to buy back shares in itself, so long as it meets the conditions set out in the Companies Act 2006 (CA 2006). This is referred to as a share buyback, or a purchase of own shares. In addition to CA 2006, there are further rules and guidance that matter for a listed company or an AIM company. In particular, a listed company must have regard to the UK Listing Rules (UKLRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must have regard to the AIM Rules for Companies (AIM Rules); however, those rules do not specifically address share buybacks, so AIM Regulation has stated that, in most circumstances, observing the UKLRs for buybacks would represent best practice for an AIM company. An AIM company is also subject to DTR 5. In addition, both types of company may take account of institutional investor guidance. The restrictions in CA 2006 relating to share buybacks do not apply to unlimited companies. For further information on that form of company, also see Practice Note: Unlimited companies...

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Web page updated on 21/05/2026

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