Treasury shares vs cancellation of shares

[freeloadx]

Hi im new here,

i am curious as to why companies actually retire their shares?

after buying back their shares, they have a choice of keep it under treasury shares, why do they actually cancel these shares?

 

[mackwaa]

Hi im new here,

i am curious as to why companies actually retire their shares?

after buying back their shares, they have a choice of keep it under treasury shares, why do they actually cancel these shares?

A company can only have a certain %age of treasury stock depending on the company's jurisdiction so if they exceed that %age they need to retire enough shares to bring them back to that %age.

The reason they buy their own shares are usually for tax advantages (capital gains tax vs corp tax vs personal tax) or to give certain shares more weighting.