Under Section 120 (b) of Myanmar Companies Law (“MCL”), there are two types of share buy-backs: (i) equal and (ii) selective.
Equal buy-back is defined under Section 120 (c) of MCL that a share buy-back is an equal buy-back if: (i) the buy-back offers concerns with the Ordinary Shares; (ii) the offers is made to every person who holds ordinary shares to buy back the same percentage of their Ordinary Shares; (iii) all of those persons have a reasonable opportunity to accept the offers made to them; (iv) the buy-back agreements are not entered into until a specified time for the acceptances of the offers has closed and (v) the terms of all the offers are the same. And, Section 120 (d) provides that all other buy-backs which do not meet the conditions set under the aforesaid Section 120 (c) are all selective buy-backs.
| Types of Buy-Backs | Requirement |
| Equal Buy-back | – Must be approved by an ordinary resolution passed at a general meeting [Section 121 (a) of MCL] – Must prepare the notice of the meeting with the inclusion of all the material information having the effect on the decision and how to vote on the resolution and the requirements set under Section 120 (a) [Section 121 (c)] – Compliance Matter (i) lodge Form C-7A on MyCO before the notice of the meeting is sent out to the shareholders and before buy-back offer is made (to attach the notice of the meeting, the document setting out the terms of the buy-back offer and documents relating to the buy-back that will accompany the offer or the notice of the meeting sent to the shareholder) [Section 121 (d)] (ii) publish the notice of its intention to call a meeting to approve a buy-back offer including the provision that the notice of the meeting and associated documents have been filed with DICA in a daily newspaper[Section 120 (d)] (iii) lodge Form C-7B on MyCO within 21 days after the resolution is passed [Section 120 (h)] (iv) publish the notice of passing of the resolution and the summary details of the buy-back in the daily newspaper (Note: the company shall not complete the buy-back until 28 days after the publication of such notice in the newspaper) [Section 120 (h)] |
| Selective Buy-back | – Must be either approved by a special resolution passed at a general meeting with no votes being cast in favor of the resolution by any person who is to receive the consideration as part of the buy-back or by their associates or approved by a resolution agreed to at a general meeting by all ordinary shareholders [Section 121 (b) of MCL] – Must prepare the notice of the meeting with the inclusion of all the material information having the effect on the decision and how to vote on the resolution and the requirements set under Section 120 (a) [Section 121 (c)] – Compliance Matter (i) lodge Form C-7A on MyCO before the notice of the meeting is sent out to the shareholders and before buy-back offer is made (to attach the notice of the meeting, the document setting out the terms of the buy-back offer and documents relating to the buy-back that will accompany the offer or the notice of the meeting sent to the shareholder) [Section 121 (d)] (ii) publish the notice of its intention to call a meeting to approve a buy-back offer including the provision that the notice of the meeting and associated documents have been filed with DICA in a daily newspaper[Section 120 (d)] (iii) lodge Form C-7B on MyCO within 21 days after the resolution is passed [Section 120 (h)] (iv) publish the notice of passing of the resolution and the summary details of the buy-back in the daily newspaper (Note: the company shall not complete the buy-back until 28 days after the publication of such notice in the newspaper) [Section 120 (h)] |
Despite the company has the right to buy-back its shares, it should be noted that Section 122 (d) of MCL indicates that “immediately after the registration of the transfer of the company of the shares bought back, the shares are cancelled”.
Therefore, regarding the timeframe for the company which buys its shares back to hold its shares is 21 days before the registration is to be made since Section 120 (h) and Section 122 (d) of MCL portray that the registration of the resolution has to be made within 21 days of the resolution is passed and the shares buy-back are cancelled right after the registration of the transfer of the shares bought back to the company.
Qualification of this Article
The article serves as a knowledge-sharing article and the interpretation of the provisions quoted here is done solely based on the legal knowledge and personal interpretation of the author. Therefore, should this article be used as a legal advice by any other party, whether for a natural person’s or corporation’s affairs, the author has no legal obligation or the author is not held accountable for such person or corporation for any reason whatsoever.
Prepared by:
Ingyin Hmwe @ Liliana [LL.B. Graduate of University of Yangon (2018), LL.M Candidate in Business Law (International Program) of Chulalongkorn University]
Contact for work or discussion:
Email: ingyinhmwe97@gmail.com , legalbandaid@gmail.com
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