Legal analysis: Share recovery includes free recovery and paid recovery. Free recovery means that a joint stock limited company recovers its allocated shares free of charge. For example, shareholders voluntarily return the allocated shares free of charge. Paid recovery, also known as "buyout" and "repurchase", means that a joint stock limited company repurchases shares from shareholders at a certain price. The reduction of the company's capital may affect the market price of the company's stock.
Legal basis: Article 143 of the Company Law of People's Republic of China (PRC), a company may not purchase its shares. Except the following circumstances: (1) reduce the registered capital of the company; (2) Merging with other companies holding shares of the Company; (3) Rewarding shares to employees of the Company; (4) Shareholders request the company to purchase their shares because they disagree with the resolution of merger or division made by the shareholders' meeting.