The Legal Effects of the Share Redemption Process in Jordanian Company Law in Light of the 2020 Instructions for Redeemable Shares for Private Shareholding Companies

Objectives: Share buybacks are an exception to the principle of share permanence and the stability of a company's capital, representing a novel concept in Jordanian corporate law. This study examines the provisions governing share buybacks and their legal effects on shareholders of repurchased shares, other shareholders, the company, and its creditors, given the issue of insufficient legal regulation of the buyback process. Methods: The study adopts a descriptive-analytical approach by examining relevant legislative texts and judicial rulings, despite their scarcity. It is divided into two main sections: the concept of redeemable shares and the legal implications of a company's share redemption process. Results: The study identifies deficiencies and inconsistencies in the legal regulation of share buybacks in Jordanian legislation, which pose risks to the rights of the company's creditors, redeemable shareholders, and the company itself. Additionally, the law does not explicitly allow granting redeemable shareholders enjoyment shares in exchange for their redeemed shares. Conclusions: The study recommends that the Jordanian legislator introduce comprehensive legal regulations that establish clear controls for the share buyback process and explicitly permit the issuance of enjoyment shares to holders in exchange for their redeemed shares.