In these species, the 10/12 limit is also applicable between share repurchases and is defined in subsections 257B (4) and 257B (5) of the Corporations Act 2001 (Law). The requirements for share repurchases within 10/12 are less severe than those that exceed this limit. It is the director`s responsibility to ensure that a share buyback does not render the business insolvent. If it is the manager or directors of the trap, it can be personally held responsible for the loss. If a share buyback results in the bankruptcy of the company, the liquidator may, if necessary, recover compensation from the selling shareholders. The simplest form of share repurchase is an equal buy-back of access. All common shareholders are offered a reasonable opportunity to review the offer, i.e. to repurchase the same percentage of their common shares. An equal access system can only include minor differences between offers, for example. B with respect to the different accrued dividend rights or the calculation of odd lots.
Section 257B of the Corporations Act also describes the steps related to the following repurchase plans: ASIC is required to be informed of the selective repurchase contemplated by the transfer of an ASIC 280 form – disclosure of share repurchase details or, alternatively, form ASIC 281 – letter of intent to proceed with a share repurchase. It is also necessary to inform ASIC of the conclusion of the selective repurchase and the cancellation of shares by the release of form ASIC 484. Shareholders and creditors must be deprived of at least 14 days by providing the repurchase documents to ASIC; Share repurchases are subject to many different rules and requirements of the Corporations Act. Therefore, it is recommended that you use the assistance of a lawyer before making share buybacks. Below is an overview of the share repurchase provisions. It is important to review the company`s by-law before proceeding with a share buyback, as the Constitution may prevent the company from buying back its own shares or subjecting the company to its power. Shareholders must be given a reasonable amount of time to consider the takeover offer; and notification to shareholders who have convened the Assembly to decide on the selective takeover should contain all the essential information relevant to the selective takeover offer. Similarly, these procedures should be defined in any shareholders` pact at the time of the incorporation of the company, in order to avoid any disputes that may arise in the future. Section 257B of the Corporations Act contains, in a similar form to the table below, a summary of the procedures that have been followed for different types of share repurchases.