Trevor v Whitworth 12 App Cas 409 is a UK company law case concerning share

Share

Share may refer to:to some dume life* To share a resource is to make joint use of it; see sharing.* Share , a man who writes Urdu poetry* Share , a stock or other security such as a mutual fund...

 buybacks. It held they were unlawful. This rule was reformed in 1980, and replaced with a statutory procedure so that shares can either be classed as redeemable or be bought back, under the Companies Act 2006

Companies Act 2006

The Companies Act 2006 is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. It had the distinction of being the longest in British Parliamentary history: with 1,300 sections and covering nearly 700 pages, and containing 16 schedules but it has since...

 sections 684-723.

Facts

A company bought back almost a quarter of its own shares. During liquidation of the company, one shareholder applied to court for the balance of amounts owed to him after the buyback.

The Court of Appeal held that he should be paid.

Judgment

The House of Lords held the buyback was ultra vires

Ultra vires

Ultra vires is a Latin phrase meaning literally "beyond the powers", although its standard legal translation and substitute is "beyond power". If an act requires legal authority and it is done with such authority, it is...

the company. Lord Herschell said the following,
Lord Macnaghten also gave an opinion.