Can a company buy its own shares?

Generally speaking, companies are not allowed to buy their shares. However, the company has not distributed profits to shareholders for five consecutive years, and the company has made profits for five consecutive years, which meets the conditions for distributing profits stipulated in this Law. When the company merges, divides or transfers major property, the shareholders who vote against the resolution of the shareholders' meeting may ask the company to acquire its equity at a reasonable price.

legal ground

Article 74 of the Company Law of People's Republic of China (PRC)

In any of the following circumstances, the shareholders who voted against the resolution of the shareholders' meeting may request the company to purchase its equity at a reasonable price:

(a) the company has not distributed profits to shareholders for five consecutive years, but the company has made profits for five consecutive years and meets the conditions for distributing profits as stipulated in this Law;

(2) The merger, division or transfer of the company's main property;

(3) Upon the expiration of the business term stipulated in the Articles of Association or other reasons for dissolution stipulated in the Articles of Association, the shareholders' meeting will adopt a resolution to amend the Articles of Association to make the Company survive.

If the shareholders and the company fail to reach an equity purchase agreement within 60 days from the date of adoption of the resolution of the general meeting of shareholders, the shareholders may bring a lawsuit to the people's court within 90 days from the date of adoption of the resolution of the general meeting of shareholders.