This article first appeared on GoLegal, co-authored by De Wet De Villiers. Click below to read the full article.
In this article, we have a high-level look at some of the important aspects that must be kept in mind when drafting a Share Buyback agreement.
A Share buyback transaction can go hand in hand with another transaction, for example, a Subscription of Share Agreement. The purpose of this note is to discuss Share Buyback transactions in general and not with reference to a specific set of facts.
Compared to the old Act (ss 85 – 87 of the 1973 Act), section 48 of the Companies Act, 2008 (the “Act”) appears to create a “more straight forward process” and in some situations allows a Share Buyback on only a board resolution. There are, however, certain pitfalls.