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Section 733: The capital redemption reserve

Companies Act 2006 · 2006 c. 46View on legislation.gov.uk

Part 18: Acquisition by limited company of its own shares — Chapter 7: Supplementary provisions

In the following circumstances a company must transfer amounts to a reserve, called the "capital redemption reserve".

Where under this Part shares of a limited company are redeemed or purchased wholly out of the company's profits, the amount by which the company's issued share capital is diminished in accordance with—

section 688(b) (on the cancellation of shares redeemed), or
section 706(b)(ii) (on the cancellation of shares purchased),

must be transferred to the capital redemption reserve.

The amount by which a company's share capital is diminished in accordance with section 729(4) (on the cancellation of shares held as treasury shares) must be transferred to the capital redemption reserve.

The company may use the capital redemption reserve to pay up new shares to be allotted to members as fully paid bonus shares.

Subject to that, the provisions of the Companies Acts relating to the reduction of a company's share capital apply as if the capital redemption reserve were part of its paid up share capital.

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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.