The rules vary depending on if its a private or a public company.
Normally a private company can not own its own shares (in Sweden, internationally this varies). The same goes for subsidiaries – a subsidiary may not, in most situations, own shares in its parent company. This is stated in 19 kap i Aktiebolagslagen.
There are however a few exceptions. A company may:
- Receive its own shares, if it doesn’t pay for them
- Acquire shares owned by a company which is taken over
- Redeem shares in certain situations when a majority owner breaks the law
- Buy its own shares at an executive auction, when the executive auction is held to resolve a claim the company has
- Receive shares in certain cases of splits or reversed splits which otherwise would lead to some shareholders receiving partial shares
If the company comes to own shares in any of the ways above it must, as soon as possible without making a loss, sell those shares. At the latest within 3 years.
All of the allowed ways for this to happen are rare, and do not occur in on what one would consider to be standard practise. In other words, you can not use it as a means to, for example, redeem shares from a founder which is leaving the company.
Redemption of Shares
It is however possible to redeem shares. If the company has sufficient assets, it is possible to redeem the own shares by reducing the share capital. It is a method which is occasionally used to redeem shares from shareholders.
For public companies the rules boil down to that you can, assuming you have enough assets, purchase your own shares. If the company is listed on a stock exchange, it may buy its own shares on the market. If the company is public but not listed on a stock exchange, the company can offer shareholders to buy part of their shares, as long as the offer is extended to all shareholders on equal terms. At most a public company may own up to 10% of its own shares.
