Also known as: reacquire · reacquired · reacquires · reacquiring · reacquisitions · re-acquisition
Written by attorneys · grounded in primary & secondary sources — see below
The process by which a corporation obtains title to its own previously issued shares. This action terminates the shares' status as outstanding equity.
Riverstone Manufacturing issued 50,000 shares to Rhea Reynolds under a vesting plan. Two years later the company terminated her employment and paid the contract price to take back the shares. The shares counted as outstanding equity until the company completed the reacquisition.
Reliance Insurance issued 10,000 redeemable preferred shares to Raymond Ramos and recorded the issuance on its ledger. Three years later the company exercised its redemption right, paid the price, and retired the shares. The shares remained outstanding until the reacquisition and retirement took effect.
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Shares remain outstanding until the corporation reacquires, redeems, converts, or cancels them. The reacquisition must follow statutory limits and any charter requirements.
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No. Shares become outstanding when issued even if the corporation holds a contractual right to repurchase them later. The reacquisition occurs only when the company actually exercises that right.
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The shareholder agreement or articles may require board approval or formal entries. Failure to follow those steps can prevent the reacquisition from terminating outstanding status.
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No. Once shares are reacquired and retired they cease to be outstanding and cannot be counted in any class vote.
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