Citation and commencement

1. —(1) These Regulations may be cited as the Companies Act 2006 (Amendment of Part 18) Regulations 2015.

(2) They come into force on 6th April 2015.

Amendments to the Companies Act 2006

2.The Companies Act 2006 is amended as follows.

3. —(1)Section 692 (financing purchase of own shares) is amended as follows.

(2) For subsection (1) substitute—

“ (1) A private limited company may purchase its own shares out of capital in accordance with Chapter 5.

(1ZA) If authorised to do so by its articles, a private limited company may purchase its own shares out of capital otherwise than in accordance with Chapter 5, up to an aggregate purchase price in a financial year of the lower of—

(a) £15,000, or

(b) the nominal value of 5% of its fully paid share capital as at the beginning of the financial year. ”

(3) In subsection (1A) for “(1)(b)(ii)” substitute “(1ZA)(b)”.

(4) In subsection (2) for “subsection (1)” substitute “subsections (1) and (1ZA)”.

4. In section 708(2) (notice to registrar of cancellation of shares), after “a statement of capital” insert “, except where the statement of capital would be the same as a statement of capital that is required to be delivered to the registrar under section 720B(1)”.

5. In section 709 (power of private limited company to redeem or purchase own shares out of capital), at the end add—

“ (3) This Chapter is subject to section 692(1ZA) (purchase of own shares up to annual limit). ”

6. Section 723 (when payment out of capital to be made) is amended as follows—

(a) for the heading substitute “Time when payment out of capital to be made or shares to be surrendered”,

(b) for subsection (1A) substitute—

“ (1A) Shares to be purchased in accordance with a resolution under section 720A must be surrendered—

(a) no earlier than five weeks after the date on which the resolution under section 720A is passed, and

(b) no later than seven weeks after that date. ”

7. For section 724(1)(b) (treasury shares) substitute—

“ (b) the purchase is made out of distributable profits. ”

8. In section 733(3) (the capital redemption reserve), after “under Chapter 5” insert “or under section 692(1ZA)”.

9. —(1)Section 734 (accounting consequences of payment out of capital) is amended as follows.

(2) In subsection (1) after “Chapter 5” insert “or section 692(1ZA)”.

(3) After subsection (1) insert—

“ (1A) In relation to a payment under section 692(1ZA) references to the permissible capital payment are to the purchase price of the shares or (if less) the part of it met out of the payment under section 692(1ZA) and any proceeds of a fresh issue used to make the purchase. ”

(4) In subsection (4) for “this Chapter” substitute “Chapter 5”.