1 February 2013

The BIS report on the Nuttall Review of Employee Ownership was published in July 2012. BIS has now completed the next stage in its implementation programme. It has carried out a consultation (which closed in November 2012) on the recommendations set out in the Nuttall Review.

The consultation paper sought views on changes to the conditions under which a company can authorise and finance the repurchase of its own shares, and hold them once repurchased. This is part of the wider drive to promote a new ‘employee owner’ business model. Key proposals include:

• allowing the contract for an off-market buy back of shares to be authorised by ordinary resolution (as opposed to the existing special resolution)
• enabling companies to pay the purchase price for a buy back of shares purchased for or pursuant to an employee share scheme in instalments (payment must currently be made in full on purchase)
• increasing the funding options available to finance a share buy back, including by revisiting the restrictions on paying for buy backs out of capital
• allowing private companies to hold bought-back shares in treasury (rather than cancelling them), as listed companies are able to do…

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