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Section 162: Power of company to purchase own shares.

Companies Act 1985 · 1985 c. 6View on legislation.gov.uk

Part V: Share Capital, its Increase, Maintenance and Reduction — Chapter VII: Redeemable Shares; Purchase by a Company of its Own Shares

Subject to the following provisions of this Chapter, a company limited by shares or limited by guarantee and having a share capital may, if authorised to do so by its articles, purchase its own shares (including any redeemable shares).

The terms and manner of a purchase under this section need not be determined by the articles as required by section 160(3).

Where a company makes a purchase of qualifying shares out of distributable profits under this section, section 162A applies to the shares purchased; and accordingly section 160(4) does not apply to those shares.

A company may not under this section purchase its shares if as a result of the purchase there would no longer be any member of the company holding shares other than redeemable shares or shares held as treasury shares .

For the purposes of this Chapter "qualifying shares" are shares which—

are included in the official list in accordance with the provisions of Part 6 of the Financial Services and Markets Act 2000 ,
are traded on the market known as the Alternative Investment Market established under the rules of London Stock Exchange plc,
are officially listed in an EEA State, or
are traded on a market established in an EEA State which is a regulated market which appears on the list drawn up by that State pursuant to Article 47 of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments,

and in paragraph (a) "the official list" has the meaning given in section 103(1) of the Financial Services and Markets Act 2000.

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This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.