The Companies (Treasury Shares) Regulations, 2016 and The Companies (Treasury Shares) (Amendment) Regulations, 2016

18 Oct 2016

The Companies (Treasury Shares) Regulations, 2016 and The Companies (Treasury Shares) (Amendment) Regulations, 2016 (together the "Regulations") were both implemented on 22 July 2016.  The Regulations have had a significant impact on how companies in Guernsey are able to hold shares in their own treasury.

Prior to the Regulations, the Companies (Guernsey) Law, 2008 (the "Law") provided that “the number of shares of any class held as treasury shares must not at any time exceed 10% (or such other percentage as may be prescribed by the Commerce & Employment Department) of the total number of issued shares of that class at that time”. The Regulations amend the maximum percentage of shares a company can hold as treasury shares to 100%. The Regulations state that “the number of shares of any class held as treasury shares must not at any time exceed 100% (or such other percentage as may be prescribed by the Commerce & Employment Department) of the total number of issued shares of that class at that time“ and that "at least one share in the company…must be held by a person other than the company.”

Treasury shares allow a company to transfer shares and retain greater control and flexibility in managing its share capital.

Should you required further information or advice on this matter please contact us.