631. Financing of purchase of own shares

(1) A private limited company may purchase its own shares-
(a) out of capital in accordance with Chapter 5, and
(b) with cash (if authorised to do so by its articles) up to an amount in a financial year not exceeding the lower of-
(i) 25,000 US dollars, or
(ii) the value of 5% of its share capital.
(2) If the share capital of the company is not denominated in US dollars, the value in US dollars of the share capital shall be calculated for the purposes of subsection 631(1)(b)(ii) at an appropriate spot rate of exchange.
(3) The rate must be a rate prevailing on a day specified in the resolution authorising the purchase of the shares.
(4) Subject to subsection (1) -
(a) a limited company may only purchase its own shares out of-
(i) distributable profits of the company, or
(ii) the proceeds of a fresh issue of shares made for the purpose of financing the purchase, and
(5) This section has effect subject to section 676(4) (terms of purchase enforceable in a winding up).