Companies Ordinance Cap 32

Section Num: 49B     Version Date 01/04/2003

Power of company to purchase own shares

(1) Subject to sections 49, 49A, 49BA, 49C, 49E, 49F, 49G, 49H, 49P, 49Q, 49R and 49S, a listed company may, if authorized to do so by its articles, purchase its own shares (including any redeemable shares).

(2) Subject to sections 49 to 49S, an unlisted company limited by shares or limited by guarantee and having a share capital may, if authorized to do so by its articles, purchase its own shares (including any redeemable shares).  <* Note - Exp. X-Ref.: Sections 49, 49A, 49B, 49BA, 49C, 49D, 49E, 49F, 49G, 49H, 49I, 49J, 49K, 49L, 49M, 49N, 49O, 49P, 49Q, 49R, 49S *>

(3) Sections 49 and 49A apply to the purchase by a  company under this section of its own shares as they apply to the redemption of redeemable shares, save that the terms and manner of purchase need not be determined by the articles as required by section 49A(3).

(4) Notwithstanding subsections (1) and (2) but subject to sections 49, 49A, 49F, 49G, 49H, 49I(4) and (5), 49P, 49Q, 49R and 49S, except that such purchases may be made either out of or otherwise than out of its distributable profits or the proceeds of a fresh issue of shares, a listed company and an unlisted company limited by shares or limited by guarantee and having a share capital may, if authorized to do so by its articles, purchase its own shares (including any redeemable shares) in order to-

(a) settle or compromise a debt or claim;

(b) eliminate a fractional share or fractional entitlement or in the case of a listed company, an odd lot of shares;

(c) fulfil an agreement in which the company has an option or is obliged to purchase shares under an employee share scheme which had previously been approved by the company in general meeting; or

(d) comply with an order of the court under section 8(4), 47G(5) or 168A(2).  (Amended 13 of 1995 s. 2)

(5) In subsection (4)(b), an "odd lot of shares" (¸HªÑ) means a number of shares in the company less than the usual number authorized for trading on a recognized stock market.  (Amended 5 of 2002 s. 407)

(6) 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.

(Added 77 of 1991 s. 4)

[cf. 1985 c. 6 s. 162 U.K.]