Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Treasury shares definition

What does Treasury shares mean? In practice, treasury shares are a company’s own shares that it has lawfully bought back and chosen not to cancel, but to hold in treasury for possible resale, transfer or later cancellation. In the UK, the regime is set out in the Companies Act 2006 (Part 18, including ss 724–729). Statutory conditions apply, typically including that the buy-back is made out of distributable profits. While held in treasury, the shares confer no voting rights and no entitlement to dividends or other distributions, and are disregarded for voting and similar capital calculations. The company may later sell, transfer (for...

Cancelling Treasury Shares (UK): Companies Act 2006 procedure, stamp tax, Companies House filings (SH05/SH06), accounting impact and disclosures; FCA Listing Rules, AIM Rule 17, DTRs and UK MAR notifications

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Practice notes

Treasury shares

A limited company can acquire or otherwise deal in its own Shares provided it meets the conditions in the Companies Act 2006 (CA 2006). Any such shares are kept in treasury and are described as the company’s treasury shares. Beyond CA 2006, additional Rules and guidance apply to listed and AIM companies. In particular, a listed company must consider the Listing Rules (LRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must also have regard to the AIM Rules for Companies (AIM Rules), although these do not expressly cover share buybacks; accordingly, AIM Regulation has indicated that following the LRs for buybacks will, in most cases, amount to best practice. An AIM company is also subject to DTR 5. In addition, both types of company may choose to follow guidance issued by institutional investors. The statutory framework for treasury shares is contained in CA 2006, ss 724–732. If a company breaches any of these provisions (other than CA 2006, s 730, see below), an offence is committed by the company and by every officer in default...

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Web page updated on 21/05/2026

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