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Purchase of own shares - Coggle Diagram
Purchase of own shares
Companies are permitted under certain circumstances and subject to any restrictions in the Articles, to purchase or acquire their own fully paid shares
In general, companies may only purchase shares out of distributable profit or the proceeds of a fresh issue of shares
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Under a scheme involving a payment out of capital, the company must use all of its distributable profit first
Whichever process is chosen it is necessary to ensure that the Articles contain the necessary authority and secondly that tax advice and clearance is sought to ensure that the taxation consequences for the company and the members whose shares are to be acquired are understood