A share buy back generally proceeds as follows:
1. Directors meet to convene a general meeting at which they put forward the resolution approving the share buy back.
2. The secretary issues notices of the general meeting to all shareholders. Attached to that notice must be the wording of the proposed resolution and all matters which the company believes would be relevant to adequately inform the shareholders prior to asking them to decide upon the resolution. Included in these attachments must be a copy of the proposed Share Sale Agreement between the company and those shareholders involved in the share buy back.
3. ASIC must receive a copy of the notice of general meeting together with all papers issued to shareholders, including a copy of the proposed Share Sale Agreement.
4. The general meeting takes place so that shareholders can decide upon the proposed share buy back.
5. Settlement of the transaction should next take place, where the Share Sale Agreement and Share Transfer Form are executed. In Victoria, no stamp duty is payable on these instruments. If the company is incorporated in another state, duty may be payable.
6. Notice of transfer and cancellation of shares to be sent to ASIC. There is a set timetable to follow this procedure. You are ‘locked into’ observing certain timeframes. All up, the procedure is usually completed within two months.
If you would like to start a share buy back, simply fill in our order form and submit it to us. We’ll be happy to help.