Shareholders must be given a reasonable amount of time to consider the takeover offer; and it is necessary to inform ASIC of the cancellation of the shares with respect to all types of share buybacks, changes to company data (form 484 – online). There are three main types of share buybacks for private companies: a publicly traded company can also buy non-marketable share packages to shareholders (so-called minimum buyback). This does not require dissolution, but the shares purchased must continue to be cancelled. The provisions recognize five fundamental types of share buybacks: equal market access, the employee shareholding system, selective redemption and minimum shareholding (formerly known as the “odd lot”). In these types, the rules also differ between share repurchases that buy 10% or less of total shares over a 12-month period and share repurchases of more than 10%. This is sometimes a 10/12 limit and is set in s257B (4) and 257B (5) of the Corporations Act 2001 (Corporations Act). The requirements for share repurchases within 10/12 are less severe than those that exceed this limit. A company that intends to offer shareholders asymmetrically the share buyback must make a selective repurchase. This process allows a company to offer a buyout if it does not intend to offer the buyback to all shareholders in the same way. Selective redemption is appropriate in scenarios in which the company attempts to repurchase the shares of a single outgoing shareholder. (4) The 10/12 limit for a buyout company is 10% of the smallest number of votes related to the voting company`s shares. For example, the company must give its shareholders and ASIC at least 14 days for the takeover. Note: a Memorandum of Understanding is used for the completion of a share buyback (form 281) and a communication on the details of share repurchases (form 280), in the case of an employee shareholding system above the 10/12 limit, a buy-back beyond the 10/12 limit, an equal access system or a selective buyback only if: share buybacks can also help a company reduce its cost of capital, consolidate ownership, adjust significant financial ratios or, in some cases, allow a company to benefit from a temporary valuation.

One of the advantages of buying back the shares is that it increases earnings per share on other shares. It also means that shareholders who wish to withdraw can do so, while others can stick to their entire shareholding. There are 8 different types of share repurchases made by CAS 360.