Companies Act, 1990

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Treasury shares.

209.—(1) Subject to the provisions of this section, a company mayinstead of cancelling shares upon their redemption hold them (as “treasury shares”) and shares so held may be dealt with by the company in the manner provided for in subsection (4) but not otherwise.

(2) (a) The nominal value of treasury shares held by a company may not, at any one time, exceed ten per cent of the nominal value of the issued share capital of the company.

(b) For the purposes of paragraph (a), the following shall also be deemed to be shares held by the company—

(i) shares held in the company by any subsidiary in pursuance of section 224 , and

(ii) shares held in the company by any subsidiary in pursuance of section 9 of the Insurance Act, 1990 , and

(iii) shares held in the company by any person acting in his own name but on the company's behalf.

(3) For so long as the company holds shares as treasury shares—

(a) the company shall not exercise any voting rights in respect of those shares and any purported exercise of those rights shall be void; and

(b) no dividend or other payment (including any payment in a winding up of the company) shall be payable to the company in respect of those shares.

(4) Treasury shares may either be—

(a) cancelled by the company in which case the provisions of section 208 shall apply as if the shares had been cancelled on redemption, or

(b) subject to subsections (5) and (6), may be re-issued as shares of any class or classes.

(5) A re-issue of shares under this section shall be deemed for all the purposes of the Companies Acts to be an issue of shares but the issued share capital of the company shall not be regarded for any purpose (including the purposes of any enactments relating to stamp duties) as having been increased by the re-issue of the shares.

(6) (a) The maximum and minimum prices at which treasury shares may be re-issued off-market (“the re-issue price range”) shall be determined in advance by the company in general meeting in accordance with paragraphs (b), (c) and (d) and such determination may fix different maximum and minimum prices for different shares.

(b) Where the treasury shares to be re-issued are derived in whole or in part from shares purchased by the company in accordance with the provisions of this Part the re-issue price range of the whole or such part (as the case may be) of those shares shall be determined by special resolution of the company passed at the meeting at which the resolution authorising the said purchase has been passed and such determination shall, for the purposes of this subsection, remain effective with respect to those shares for the requisite period.

(c) Where the treasury shares to be re-issued are derived in whole or in part from shares redeemed by the company in accordance with the provisions of this Part the re-issue price range of the whole or such part (as the case may be) of those shares shall be determined by special resolution of the company passed before any contract for the re-issue of those shares is entered into and such determination shall, for the purposes of this subsection, remain effective with respect to those shares for the requisite period.

(d) The company may from time to time by special resolution vary or renew a determination of re-issue price range under paragraph (b) or (c) with respect to particular treasury shares before any contract for re-issue of those shares is entered into and any such variation or renewal shall, for the purposes of this subsection, remain effective as a determination of the re-issue price range of those shares for the requisite period.

(e) (i) For the purposes of determining in this subsection whether treasury shares are re-issued off-market, the provisions of section 212 (off-market and market purchases) shall have effect with the substitution of the words “re-issue”, “off-market re-issue” and “reissued” respectively for the words “purchase”, “off-market purchase” and “purchased” in subsection (1) (a) of that section.

(ii) In this subsection, “the requisite period” means the period of eighteen months from the date of the passing of the resolution determining the re-issue price range or varying or renewing (as the case may be) such determination or such lesser period of time as the resolution may specify.

(7) A re-issue by a company of treasury shares in contravention of any of the provisions of subsection (6) shall be unlawful.