Companies Act (Cap. 386), article 106

106. (1) Without prejudice to the principle of equal treatment of the shareholders who enjoy the same rights in respect of the shares held by them and to any relevant provisions of the Prevention of Financi al Markets Abuse Act , a company may acquire any of its own shares o therwise than by subscription, provided all the following conditions are respected - (a) provision is made by the memorandum or articles of the company for authorising the acquisition by the company of its own shares; (b) authorisation is given by an extraordinary resolution, which resolution shall determine the terms and conditions of such acquisitions and in particular the maximum number of shares to be acquired, the duration of the period for which the authorisation is given and which may not exceed eighteen months and, in the case of acquisition for valuable consideration, the maximum and minimum consideration; (c) the provisions of article 135 shall apply in respect of the extraordinary resoluti on referred to in paragraph (b) above subject however to the condition that shares COMP ANIES [CAP. 386. 65 already held by th e company itself shall be treated as carrying no voting rights; (d) the nominal value of the acquired shares, including shares previously acquired by the company and held by it shall not exceed fifty per cent of the issued share capital; (e) no acquisitions by a company of its own shares shall be made when on the closing date of the last accounting period the net assets as set out in the company’s annual accounts are, or following such distribution, would become lower than the amount of called up issued share capital plus those reserves which may not be distributed under the provisions of this Act or the company’s memorandum or articles; and in any case it shall not be possible for the company t o a c q u i r e a n y o f i t s o w n s h a r e s e x c e p t o u t o f t h e proceeds of a fresh issue of shares made specifically for the purpose, or out of profits available for distribution; (f) the shares acquired shall be fully paid up shares; and (g) a company may not as a result of the acquisition of any of its shares become the only holder of its ordinary shares. (2) The company shall deliver to the Registrar for registration a copy of the resolution mentioned in sub-article (1). If default is made in complying with the provisions of this sub-article, ever y officer of the company who is in default shall be liable to a p enalty, and, for every day during which the default continues, to a fur ther penalty. (3) The provisions of sub-article (1)( b) shall not apply where the acquisition of a company’s o wn shares is necessary to preve nt serious and imminent harm to the company. (4) The provisions of sub-article (1)( b) shall furthermore not apply to shares acquired either by the company itself or by a p erson acting in his own name but on the company’s behalf for distribu tion to that company’s employees or to the employees of its parent company or of any of its subsidiary undertakings. Such shares s hall be distributed within one year of their acquisition. (5) References in this article and in articles 107 to 110 to a company holding, acquiring or otherwise dealing in its own shar es shall be deemed to include ref erences to the company so doing either itself or through a person acting in his own name but on the company’s behalf. ( 6 ) T h e c o m p a n y m a y , a t a n y t i m e , c a n c e l a n y o f t h e s h a r e s acquired in accordance with the provisions of this article and article 83 shall not apply to such cancellation. Upon the cancellation becoming effective, the amount of the issued share capital shal l be reduced accordingly by the nominal value of the shares cancelle d. 66 CAP. 386.] COMP ANIES (7) Within fourteen (14) days af ter the cancellation of shares become effective as set out in s ub-article (6), the company sha ll deliver to the Registrar a notice for registration. (8) In cases of default in complying with the provisions of sub - article (7), every officer of the company who is in default sha ll be liable to an administrative penalty. Acquisition of own shares by a company without application of article 106. Amended by: IV . 2003.55; XX. 2013.81; XVIII.2024.8; XVIII.2025.12.