Company Buyback of Shares
Structured Share Repurchases
Guiding you through compliant share buyback transactions.
A company buyback of shares (also known as a share buyback, purchase of own shares or share repurchase) allows a company to purchase its own shares from existing shareholders. It can be an effective way to facilitate a shareholder exit, return surplus cash to shareholders, reorganise ownership or provide a route for shareholders to realise their investment. However, company buybacks are strictly regulated and must follow specific legal and procedural requirements.
The transaction can involve a number of important considerations, including the company’s available funds, shareholder approvals, the terms of the purchase and the treatment of the shares following the buyback. Failure to follow the correct procedures can render the transaction void and potentially expose the company and its directors to financial and legal risk.
At Ellis-Fermor & Negus, our experienced corporate team provides practical, commercially focused advice on company share buybacks. We help companies and shareholders understand the legal requirements, prepare and negotiate the necessary documentation and ensure that the transaction is structured appropriately from the outset.
Whether the buyback forms part of a shareholder exit, ownership restructure or wider corporate transaction, we can guide you through the process and help ensure the necessary legal requirements are satisfied. We advise companies across the East Midlands and beyond, providing support tailored to the circumstances and objectives of each transaction.
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‘Excellent response times from Charlotte all supported by a very competent team at EFN. Having used EFN for many years, I couldn’t recommend their services highly enough, excellent!’
Charlotte Stojak
Solicitor and Head of Corporate
Why choose Ellis-Fermor & Negus?
Experienced corporate lawyers specialising in share buybacks and restructures.
Clear advice on director duties and compliance.
Practical solutions for owner-managed businesses.
Trusted advisers across the East Midlands.
Meet the team
Charlotte Stojak
Charlotte joined the firm in 2024 and was appointed Head of Department for Corporate in April 2025. Charlotte qualified as a Solicitor in 2015, after studying Law (LLB) at Derby University and the Legal Practice Course at Staffordshire University. Charlotte has worked at a number of large law firms, gaining invaluable experience and exposure. Charlotte’s…
0115 972 5222
charlotte.stojak@ellis-fermor.co.uk
Charlotte Stojak is based at our Long Eaton Office.
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Jennifer Geary
Jennifer grew up in Long Eaton and first worked for Ellis-Fermor & Negus during her University summer holidays in 2003. She graduated from Derby University in 2004 with a Law Degree and returned the same summer to Ellis-Fermor & Negus as an Assistant to David Negus in the Commercial and Litigation Department to complete her…
01159 835 221
jennifer.geary@ellis-fermor.co.uk
Jennifer Geary is based at our Long Eaton Office.
View profileFrequently Asked Questions
A company buyback of shares involves:
- A company purchasing its own shares from one or more shareholders.
- Cancelling or holding those shares in treasury (where permitted).
- Adjusting the company’s share capital accordingly.
Common reasons for a company buyback of shares include:
- Facilitating retirement or exit of a shareholder by using the company distributable reserves.
- Resolving shareholder disputes.
- Removing minority shareholders.
- Returning surplus cash to investors.
- Restructuring ownership before sale or investment.
Funding the Company Buyback of Shares
- From distributable profits.
- From proceeds of a new share issue.
- Using a capital payment procedure (private companies only).
Shareholder Approval
- Ordinary or special resolutions, depending on structure.
- Approval of the share buyback contract.
Tax Treatment
- Advance clearance where appropriate is advised.
Director Duties
- Ensuring the transaction benefits the company and its members as a whole.
- Managing conflicts of interest.
- Protecting creditor interests.
We guide directors and shareholders through these complexities to minimise risk and working with clients’ tax and financial advisors maximise tax efficiency.
Step 1: Initial Consultation
- Understand the commercial objective.
- Working with your tax and financial advisors to review company finances and distributable reserves.
Step 2: Structuring the Transaction
- Determine funding method.
- Consider capital treatment eligibility.
- Draft share buyback agreement.
Step 3: Approvals and Documentation
- Prepare board minutes and shareholder resolutions.
- Ensure statutory compliance.
Step 4: Completion and Filings
- Execute share buyback agreement and other ancillary documents
- File relevant documents/forms at Companies House.
- Update statutory registers.
- Assist with stamp duty requirements.
We ensure each stage is completed accurately and efficiently.
If you are considering a company buyback of shares, expert legal guidance ensures the process is compliant, tax-efficient, and aligned with your commercial objectives.
Phone: 0115 972 5222 • Contact form: ellis-fermor.co.uk/contact-us
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