Redemption of shares

A limited company may allot and issue redeemable shares.

The terms 'allotment' and 'issue' are often used interchangeably in relation to new shares in the capital of a company. However, the terms do have distinct legal meanings.

Shares in a company are allotted when a person acquires the unconditional right to have their name included in its register of members in respect of those shares. Shares in a company are issued when the name of the person to whom those shares have been allotted is entered in its register of members in respect of them. Therefore, allotment creates a right for a person to be registered as a member of a company, but only once a share has been issued can that person exercise their rights as a member.

For information on how redeemable shares may be allotted and issued and the reasons why a company may allot, issue and redeem them, see Practice Note: Issue of redeemable shares.

Legal framework

Redeemable shares are a statutory concept contained in Part 18 of the Companies Act 2006 (CA 2006), which includes detailed provisions relating

To view the latest version of this document and thousands of others like it, sign-in with ��˾��ҹ�� or register for a free trial.

TAKE A FREE TRIAL

Latest Corporate News

High Court confirms broad government discretion in UK national security reviews

Competition analysis: In this judgment, the High Court issued its first ever ruling on a challenge to an unwinding order imposed by the UK government under the National Security and Investment Act 2021 (NSIA 2021). In a clear victory for the government, the court confirmed the broad discretion of the Secretary of State to determine the appropriate remedy for resolving national security concerns arising from a problematic transaction, up to and including forced divestment of the acquirer’s shareholding in a qualifying entity, as well confirming that the overall process followed by the Government in such cases is fair and proportionate. The judgment is also notable for the insights that it provides into the process followed by Government officials and ministers for in-depth reviews under the NSIA 2021, with the level of detail going well beyond what has been disclosed in the Government’s own guidance to date. Written by Becket McGrath, partner at Euclid Law Ltd.

Corporate weekly highlights—19 December 2024

This week's edition of Corporate weekly highlights includes: an FCA consultation on the regulatory framework for the Private Intermittent Securities and Capital Exchange System (PISCES), FCA Primary Market Bulletin 53 containing a consultation on changes to technical and procedural notes in the FCA Knowledge Base following changes to the UK listing regime, The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 which will increase financial thresholds for the purposes of certain Companies Act reporting requirements, news of the UK Sustainability Disclosure Technical Advisory Committee’s recommendation to endorse IFRS Sustainability Disclosure Standards, PERG publishing its 17th report on conformity with the Walker Guidelines, together with an amended version of the guidelines and ISS Governance publishing updates to its UK and Ireland proxy voting guidelines 2025.

Cabinet Office publishes assessment report on National Security and Investment Act

The Cabinet Office has released a report detailing the assessment and conclusions of the evaluation of the National Security and Investment Act (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021. This review provides insights into the government's analysis of the current regulatory framework and its implications for national security considerations in the context of credible entity acquisitions.

FRC publishes UK TAC endorsement recommendations for IFRS S1 and S2

The Financial Reporting Council (FRC) has published the UK Sustainability Disclosure Technical Advisory Committee (TAC)’s final recommendations to the Secretary of State for Business and Trade, Jonathan Reynolds, endorsing IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and IFRS S2 Climate-related Disclosures (IFRS S2). The TAC’s technical assessment concluded that the endorsement of IFRS S1 and S2 would benefit the long-term public good in the UK. While most requirements were maintained without alteration, the TAC proposed minor amendments to IFRS S1, including extending the 'climate first' reporting relief for up to two years. It also recommended that the UK Sustainability Disclosure Policy and Implementation Committee develop guidance to clarify how entities can align IFRS S1 with existing sustainability-related disclosure requirements under the UK's current legal framework. In addition, it proposed amending IFRS S2's requirement on the use of the Global Industry Classification Standard for disaggregating financed emissions.

��˾��ҹ��