§ 54238 Stock Buyback Authority

• •A group (like a club or company) can buy back its own shares, but only if it's not too deep in debt.
• •The group can't owe more than half of what it owns.
• •The group decides the price of the shares, and must pay for them within a year.

Imagine a small company that makes toys. The company has some money saved up and wants to buy back some of its own shares from people who own part of the company.

The company can do this only if it doesn't owe too much money. If the company owes more than half of what it owns, it can't buy back the shares. The company's leaders decide the price of the shares and have one year to pay for them.