Treasury share are shares held by the company that issued them. A company acquires treasury shares by buying them in the market.
In the UK, Treasury shares can be cancelled, sold, or used in employee share (or share option) schemes. Companies are required to disclose their holding of treasury shares and any sales, cancellations or transfers.
The commonest use of treasury share among UK listed companies seems to be to hold shares for employee share schemes.
Treasury shares do not receive dividends or rights and they cannot be used to vote at or attend company meetings. They are shown on the balance sheet, but they are deducted from share capital.
Treasury shares are disregarded in calculating undiluted EPS.