What is the process for repurchasing corporate stock?

Repurchasing corporate stock, also known as a “stock buyback,” is a process in which a company buys back its own stocks from the public in order to reduce the number of outstanding shares and increase the value of the remaining shares. In Washington, a corporation that wishes to repurchase its own stock must first obtain approval from the state’s Division of Corporations to do so. The corporation must then file a written application with the Division, setting forth the reasons why the corporation wants to buy back the stock. After the Division reviews the application and approves the stock buyback, the corporation must then communicate the terms of the repurchase to its shareholders. Depending on the laws of the state, the shareholders will have a certain amount of time to accept or reject the terms outlined in the communication. If the shareholders accept, the corporation will then have the right to repurchase the stock from the shareholders at the stated price. Once the transaction is complete, the corporation must then file a Notice of Stock Repurchase with the Division of Corporation. This Notice must include the amount of stock repurchased and the final consideration paid for the stock. After the Notice is filed, the company can then take the steps necessary to reduce the number of outstanding shares, such as canceling the repurchased shares or re-issuing them to specific owners.

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What is the process for repurchasing corporate stock?

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