Write short notes on the following: Treasury Shares

Treasury Shares India Treasury shares in India are used to be created in two scenarios by Mergers and Amalgamations of companies or by Buy-back of securities of the company. However, Section 233(10) of the Companies Act, 2013 prohibits the creation of treasury shares in Merger and Amalgamation, stating that a transferee company shall not on merger or amalgamation, hold any shares in its own name or in the name of any trust either on its behalf or on behalf of any of its subsidiary or associate company and all such shares shall be cancelled or extinguished on the merger or amalgamation of the company. It may also be noted that, Regulation 11 of the SEBI (Buy-Back of Securities) Regulations, 2018, states that the company shall ensure that all the securities bought-back are extinguished within seven days of expiry of buy-back period. UK Companies Act, 2006 Under the UK Companies Act, 2006, Treasury Shares are the company's own issued shares that it has repurchased in accordance with Chapter 4 of the said Act and the purchase is made out of distributable profits. As per Section 724 of the UK Companies Act, 2006, where shares are held by the company, the name of the company must be entered in its register of members (or, as the case may be, the company's name must be delivered to the registrar under Chapter 2A of Part 8 of the UK Companies Act, 2006) as the member holding the shares. According to Section 726 of the UK Companies Act, 2006, the company must not exercise any right (to attend or vote at meetings) in respect of the treasury shares, and any purported exercise of such a right shall be void. Also, no dividend may be paid, and no other distribution (whether in cash or otherwise) of the company's assets (including any distribution of assets to members on a winding up) may be made to the company, in respect of the treasury shares. Section 727 of the UK Companies Act, 2006, states that where a company hold shares as a Treasury Shares, the company may at any time- sell the shares (or any of them) for a cash consideration, or transfer the shares (or any of them) for the purposes of or pursuant to an employees' share scheme. Further, as per Section 729 of the Act, where shares are held as treasury shares, the company may at any time cancel the shares (or any of them). If company cancels shares held as treasury shares, the amount of the company's share capital is reduced accordingly by the nominal amount of the shares cancelled. The directors may take any steps required to enable the company to cancel its shares under this section without complying with the provisions of Chapter 10 of Part 17 of the UK Companies Act, 2006 (i.e. reduction of share capital). Singapore Companies Act, 1967 Section 4 of the Singapore Companies Act, 1967, defines the 'Treasury Shares' as a share which was (or is treated as having been) purchased by a company in circumstances in which Section 76H of the Singapore Companies Act, 1967 applies; and has been held by the company continuously since the treasury share was so purchased As per Section 76H of the Singapore Companies Act, 1967, pertaining to Treasury Shares, where ordinary shares or stocks are purchased or otherwise acquired by a company in accordance with the provisions of the Section 76B to 76G of the Singapore Act, 1967, the company may hold the shares or stocks (or any of them); or deal with any of them, at any time, in accordance with section 76K, as provided hereunder: Where shares are held as treasury shares, the company may at any time sell the shares (or any of them) for cash; transfer the shares (or any of them) for the purposes of or pursuant to any share scheme, whether for employees, directors or other persons; transfer the shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets of a person; cancel the shares (or any of them); or sell, transfer or otherwise use the treasury shares for such other purposes as the Minister may by order prescribe. Further, as per Section 76(1), where a company has shares of only one class, the aggregate number of shares held as Treasury Shares shall not at any time exceed 10% of the total number of shares of the company at that time. Where the share capital of a company is divided into shares of different classes, the aggregate number of the shares of any class held as treasury shares shall not at any time exceed 10% of the total number of the shares in that class at that time.