What approval is required under the Corporations Act 2001 if a company wishes to buy back its own shares?
A) Shareholders' approval is required if more than 5% of the shares are to be bought over a 12 month period
B) Shareholders' approval is required if more than 10% of the shares are to be bought over a 12 month period
C) Shareholders' approval is required for all buy-backs
D) None of the above

Question

Quizplus · Accepted Answer

According to Section 257A of the Corporations Act 2001, shareholders' approval is required for a buy-back of more than 10% of a company's shares over a 12 month period. If the buy-back is less than 10%, only board approval is required. However, if the buy-back exceeds the 10% limit, a special resolution is required to be passed by the shareholders. Therefore, option B is the correct answer.

What Approval Is Required Under the Corporations Act 2001 If