The Companies (Treasury Shares) Regulations, 2016
(Regulations) were implemented on 22 July 2016,
effectively removing the limit on the number of shares that a
Guernsey company can hold in treasury.
Treasury shares are shares that effectively a company holds in
itself. Shares may be transferred into treasury following the
acquisition of those shares by the company from a shareholder and
may then be held, cancelled, sold or transferred to an employee
share scheme. This affords companies greater flexibility when
seeking to manage their share capital base as companies can hold
shares in treasury thereby avoiding the time and expense of
cancelling repurchased shares and subsequently issuing new
Prior to the Regulations being introduced, under the Companies
(Guernsey) Law, 2008 (as amended) (Law), if a
company was authorised under the Law to hold treasury shares, the
number of shares of any class which could be held as treasury
shares could not at any time exceed 10% of the total number of
issued shares of that class at that time. However, with
effect from 22 July 2016, the Regulations have amended the Law to
permit companies authorised to hold treasury shares to hold 100% of
the total number of issued shares of any class or classes as
treasury shares, provided that at least one non-redeemable share in
the company of any class is held by a person other than the
This change in the Law is welcome and we expect a number of
companies, particularly those who shares are listed, will seek
to take advantage of this.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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