Redemption of Shares With Share Capital Reduction: Some Practical Aspects

This study examines practical challenges associated with interpreting the system of share redemption with a share capital reduction. Share redemption serves not only as a mechanism for reducing share capital but also as a vital tool for regulating shareholders' interests. We analyse the extent to which the articles of association should provide for the causes of amortisation and argue that share redemption can be used as a way of making shareholders' agreements self-enforceable. Our argument emphasizes the need to prioritize shareholders' autonomy within the articles of association, suggesting that provisions for free redemption or below-market share valuation can be deemed acceptable. Additionally, we explore criteria for determining consideration when the articles of association lack specific guidelines.