Using Inform Direct is is easy to complete a Purchase and Cancellation of shares. Inform Direct will then populate forms SH03, SH06 and SH07 if applicable. They will be auto populated with the relevant details. A copy will be automatically saved in the document library. 

Note: If the total purchase of shares exceeds £1,000.00 then the SH03 must be sent to HMRC for stamping and the relevant duty must be paid. For help with this please visit https://www.gov.uk/guidance/pay-stamp-duty..


1. Go to the Share Classes tab and select Share reorganisation.



2. Next, select 'Purchase of own shares' option and click 'Next.'



3. Then, input the date of purchase and choose the correct share class. Then make sure to select 'Immediately cancel the shares.'



4. Now choose How the company has funded the purchase of it's own shares.



Note: If 'All or partly out of capital' you will need to state whether a court order was obtained. Both options present you with a list of requirements in order to continue. We recommend that you obtain professional advice before proceeding.



5. Tick to confirm the board of directors has passed the necessary resolution and select 'Next'.


6. Now you can choose which shareholder' shares are being purchased. Then select, 'Complete.'


    

Note: When ‘All or partly out of capital’ has been chosen, and ‘No’ has been selected for ‘Was a court order obtained?’, You will see ‘Permissible capital payment’ – this is to allow the amount being paid out of capital to be entered to create the documents.


7. If the consideration is over £1000, you will be directed straight to step 8 below. If the consideration was £1000 or less, the below screen will appear for you to confirm if stamp duty is payable. Further details on this can be found in our blog.


Note: If the company is a PLC you will also need to confirm if section 662 of the Companies Act 2006 applies.



8. Before submitting the purchase and cancellation of shares you will be asked if approval is required, this allows you to create a summary document to be approved prior to creating the Companies House forms. 

  

Note: The approval feature is only available to subscribers of the software. What are the benefits of subscribing to Inform Direct? Pay as you go users will skip straight to the step below.


Note: Once pending, the approval for the action can be completed from the company dashboard tab.

 

9. Finally, select what supporting documents you would like to produce.

    

Note: Board minutes are only available for non PLC Companies.


The supporting documents created are: 

  • written resolution to authorise purchase of own shares;
  • resolution to authorise purchase of own shares via a meeting; and
  • board minutes resolving to propose purchase of own shares


Note: Following any share reorganisation it is often helpful to file a confirmation statement to provide an updated shareholder list to Companies House. Why might I file a Confirmation Statement early?