Under what circumstances a public company buy its own shares?

1)want to expand company

2)creditors consideration

3)leverage from debt

4)Tax reason

5)Currency for an acquisition

6)Management return cash to share holder. E t c 

1- use surplus cash available with the company, which is not available to them opportunities to invest.

2 used as a substitute to make distributions in the case expect management to have a positive impact on the prices of the company's shares in the stock market.

3 used to create market share or to create additional demand for the company's shares or to strengthen the current market price of the company's shares traded

And companies turn to this mechanism in the case of low stock prices for reasons unrelated to the performance of the company itself.

4 used to adjust property rights and the structure of shareholders, including limiting the control of some shareholders.

5 to face

Offers to purchase the company's shares hostilities lead to a reduction in terms of the number of shares traded in the free market and increase prices traded.

6 to get the tax benefits in the event of cash distributions subject to the tax consequences of where to buy the company's shares traded higher prices and then achieve capital gains by its shareholders, which may be tax-exempt.

7 to increase earnings per share by reducing the number of shares outstanding and thus reduce the profitability multiplier which makes the stock price with a certain attractiveness to investors, as well as increasing the proportion of distributions . increase profits remaining shareholders in the company of any earnings per share.

8 contributes to buy shares in the company to enrich shareholders by increasing the dividend as a result of the distribution of profits on fewer shares outstanding.

9 This mechanism is used in the purchase of shares of shareholders who wish to exit from the company and those affected by the write-off optional as is the case in the listing and delisting rules of the Egyptian Stock Exchange.

10 * used in the case of propositions new secondary where the use of treasury shares in adjusting the price of securities issued by the company and create some kind of balance between demand and supply, as in the case of subtraction secondary and composition of a fund or account to maintain the stability of the price of the stock market during a certain period after the IPO.

11 used in the case of the distribution of profits in the form of bonus shares using the treasury shares available to them at the distribution.

12 desire to increase the dividend on the outstanding shares of treasury stock under the guidance share of these profits in the direction of shares outstanding.

13 is used as a mechanism for determining a quorum to attend the General Assemblies.

14-processes used in contracts for the selection and futures contracts, which the company is a party

1. To increase promoters holding

2. Increase earning per share

3. Rationalise the capital structure by writing off capital not represented by available assets.

4. Support share value

5. To prevent takeover bid

6. To pay surplus cash not required by business

- when its firms preparing for potential friendly merger 

-  for decreasing supply of its stocks to increasing its stock price 

- or for stock employees ownership plane 

but the firm is limited to purchase only 20% of its issued and must reissue maximum one year from purchase date , and the firm should maintain amount of retained earning equal purchase price without dividend . 

Agreed with Mr. Vinod.

Agree with All of you

At one time it was completely prohibited for a company to buy its own shares. Now buy-backs are permitted subject to quite restrictive and detailed rules. The problem with companies buying their own shares is that, if completely unrestricted, there is a danger that creditors (and potential creditors) may be misled as to the size of the company's capital. This is part of the wider area of maintenance of capital. Under the Companies Act2006 a new procedure for the reduction of capital without a court order was introduced, which will sometimes be used rather than a buy back..

This is a very technical area. The rules are set out in some detail below, but a summary of them is:

1. At common law companies were prohibited from buying their own shares: Trevor v. Whitworth (1887)12 App Cas409.
2. Successive Companies Acts have made it possible for companies to buy their own shares in a number of ways. The current legislation is in Part18 of the Companies Act2006. These provisions were amended by The Companies Act2006 (Amendment of Part18) Regulations2013 SI999 ("the2013 Regulations"). The rules are relaxed a little for purchases under an employees share scheme.
3. One way is for the company to create redeemable shares and then redeem them. This has long been permitted and redeemable preference shares are quite common. Redemption is subject to the rules on finance mentioned below.
4. A company listed on the Stock Exchange can make a 'market purchase' of its shares through the Exchange, if authorised to do so by an ordinary resolution in general meeting. This, too, is subject to the rules on finance mentioned below.
5. Any company may make an 'off-market purchase' of its shares by contract with one or more particular shareholders. The contract must be approved by an ordinary resolution in general meeting. Under the original legislation a special resolution was required, but this was amended by the2013 Regulations. The shares must be cancelled when purchased or, again under the2013 Regulations, may be held as treasury shares. An off-market purchase is also subject to the rules on finance mentioned next.
6. Redemption, market purchases and off-market purchases are all subject to restrictions as to financing the redemption or purchase. This may come from either distributable profits (i.e. profits which could be paid out by way of dividend) or from the proceeds of issuing new shares. In either case the company's capital is maintained. These were relaxed slightly by the2013 regulations. See below. Further, a private company (only) may make a 'permissible capital payment' to finance a redemption or an off-market purchase. Any available profits must be used first. The directors must make a solvency statement which must be supported by the auditors, and the payment must be approved by a special resolution and advertised to creditors. Creditors and dissenting shareholders may object to the court against such payment. The2013 Regulations relaxed the rules a little where the payment is made to finance a buy back as part of and employee share scheme, as explained below.
7. Shares may be bought back as part of a reduction of capital.
8. Special rules can apply to an off-market purchase under an employees share scheme.

Agreed with Divyesh and Sara on the various reasons explained.