In Companies Act 77A, it says that special resolution requied, and buy back not more than 25% of share capital and free reserves. Further buy back should not be more than 25% of paid of share capital in a financial year.
It also mentioned that buy back can also be done upto 10% of paid up share capital and free reserves by passing board resoluation in the Board.
Please clarify by passing board resolution alone whether Pvt ltd company can buy back its own shares upto 25% of share capital in financial year?
17 December 2011
No, the Board cannot buy 25% of share capital.
Board's power to approve a Buy-Back Pursuant to companies(amendment)ordinance, 2001 issued on 23-10-2001: The amendment gives power to tbe Board to approve a buy-back, without approval of general meeting, upto 10% of the totoal paid-up equity capital and free reserves and this shall be dne by a resolution passed at a Board Meeting.
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