Share buy-back rules: increasing equity stakes

The plan to simplify share buy-back rules are unlikely to boost SME employee share ownership any time soon, says George Lovell

The government has continued its package of measures to encourage employee share ownership by relaxing the rules regarding share buy-backs. The Companies Act 2006 has been amended to make it easier for a private company to buy back shares from its employees by allowing the company to pay for the shares in instalments, reducing the shareholders' approval requirement to 50% instead of the existing 75%, and by allowing the shares to be bought back from capital or cash rather than distributable reserves.

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