Buying back shares

What it does

A buyback is when the company purchases its own shares from a shareholder, and those shares are cancelled. The total number of issued shares for that class shrinks.

Common occasions:

• Leaving employee — the company buys back vested shares per the shareholders' agreement
• Founder exit — buying out a co-founder
• Return of capital — distributing surplus cash by reducing the share count

UK companies need to follow specific procedures for buybacks (out of distributable profits, board resolution, sometimes a shareholder vote). Blankitt records the event for the cap table; check with your accountant on the legal mechanics.

How to record a buyback

1. Go to Company → Share Transactions
2. Click Buyback
3. Pick the shareholder the company is buying from
4. Pick the share class
5. Enter the number of shares being bought back
6. Set the transaction date
7. Enter the cash paid to the shareholder (consideration)
8. Add notes — e.g. "Leaver buyback per SHA clause 7.2 at strike + 0%"
9. Click Buy back

Blankitt:

• Logs the buyback in Share Transactions
• Decrements the shareholder's holding
• Shrinks the issued-share count for the class

The shareholder's row stays on the s113 register with their reduced holding. If the buyback takes their holding to zero, they remain on the register but with 0 shares — when you're ready, set their ceased_at date on the Shareholders page to retire them.

Tips

• The company can only buy back out of distributable profits (or proceeds of a fresh issue) — speak to your accountant before recording large buybacks.
• The buyback price doesn't have to match the original issue price. Recording fair-market value is what the cap table cares about.
• Bookkeeping side: the cash leaves and share capital + share premium are reduced. Auto-journal posting lands in a later release — for now the buyback is an event, not yet a bookkeeping transaction.