Summary
Summary Business Law and Practice - Buyback of Shares
- Module
- Business Law And Practice
- Institution
- University Of Law (ULaw)
Business Law and Practice - Buyback of Shares
[Show more]
Content preview
Buyback of Shares(WS14)
Outcomes
1) Legal and commercial considerations X company should take before buy back of
shares; does X company have sufficient cash to purchase the shares back and
what are the directors duties.
2) Procedure plan for buyback of shares
, Legal and commercial considerations X company should take
before buy back of shares; Does X company have sufficient cash to
purchase the shares back and What are the Directors Duties.
Unit 14 - Preparatory Task 2 – Buyback of Shares
Wellington Limited
You are assisting with the due diligence process relating to the purchase by your firm’s client
of the entire issued share capital of Wellington Limited (“Target”).
In the course of these investigations, it is discovered that there was an agreement for the
purchase by Target of 100,000 of its own ordinary £1 shares on 5 June 2020 for £300,000 in
cash from Andrew King, a director and founder shareholder. Andrew was issued the shares
at par value.
At the time of the purchase Target’s directors and shareholders were as follows:
Directors Shareholders
Andrew King Yes 100,000
Paul Rober Yes 150,000
Annette Pastor Yes 75,000
Shirley Binkley No 75,000
Amelia Bins No 100,000
Your supervisor has yet to be provided with a copy of the buy-back documentation which he
wants to analyse to check whether Target complied with the buy-back provisions of the
Companies Act 2006.
In the meantime, your supervisor has supplied you with the following information/documents:
A general meeting of Target was held on 5 June 2020.
The Articles of Association of Target at the time of the buy-back. They are the Model
Articles for Private Companies Limited by Shares (without amendment).
The audited Balance Sheet for Target dated 31 May 2020 (attached).
A search at Companies House shows that no shares were issued on or around the time
of the buy-back but an SH03 and an SH06 were filed on 26 June 2020 in respect of the
buy-back.
Come to the Unit Workshop prepared to explain:
Understand the facts:
Assisting in the due diligence process relating to the purchase of firm’s clients of
the entire issued share capital of Wellington Limited.
Discovered that there was a buy back shares from Andrew King in June 2019 –
has this been done properly?
Due diligence by looking through the company books, seeing the resolutions that
have been done, transactions that have been happened in the past. We have to
make sure that everything is done properly. If things haven’t been done, then we
can ask our client if they want to proceed or not and what safeguards it might need
if it is to proceed.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller anilaiqbal45. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £5.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now